America’s job market is starting to recover. But don’t hold your breath
While the expected improvement is certainly good news, America would still be down 16.6 million jobs since February — even after two consecutive record months of job growth.
The Bureau of Labor Statistics will release the June jobs report at 8:30 am ET on Thursday. (The traditional Friday release day coincides with the Independence Day holiday.)
America’s job market, even as it improves, is being pummeled by a number of factors that are in opposition to each other.
Businesses are reopening, which is good for the labor market, and government stimulus as such the Paycheck Protection Program are helping, too, said Erica Groshen, a senior labor economics adviser at the Cornell University School of Industrial and Labor Relations.
At the same time, the pandemic recession still has some industries in a choke hold, and rising Covid-19 infections are threatening to put a stop to the reopening.
Another 1.4 million first-time claims for unemployment benefits are expected for the week ending June 27. Continued claims, which count workers who filed for benefits at least two weeks in a row, are expected to be 19 million — half a million less than in the prior week.
What the data is really telling us
The number of unemployed people and workers filing for benefits remains staggeringly high. And the statistics don’t even tell the whole story.
“About a quarter of the workforce is still either unemployed, had their hours reduced, or had their pay cut,” said Mark Zandi, chief economist at Moody’s, in a note.
During the pandemic, many people whose places of work shut down were counted as employed but absent, when in fact they had lost their jobs — hopefully only temporarily — due to the lockdown. The BLS estimates a whopping 4.9 million workers were misclassified in May.
So economists and laypeople alike will have to take Thursday’s unemployment rate with a grain of salt.
“Containing the virus and supporting the economy are not mutually exclusive,” Zandi said. “In fact, a healthy population is a necessary condition for a strong economy.”