More Good News on U.S. Employment


Total nonfarm payroll employment rose by 1.8 million in July, and the unemployment rate fell to 10.2 percent, the U.S. Bureau of Labor Statistics reported today. These improvements in the labor market reflected the continued resumption of economic activity that had been curtailed due to the coronavirus (COVID-19) pandemic and efforts to contain it. In July, notable job gains occurred in leisure and hospitality, government, retail trade, professional and business services, other services, and health care.

This is the opening paragraph of the Bureau of Labor Statistics’ news release today on the jobs numbers for July.

This is not nearly as good as the June numbers, which were very good. Nevertheless, any month in which the number of people employed rises by more than half a percent is a very good month. (Household data show that 142.2 million people were employed in June and that that had risen by 1.35 million in July, an increase of 0.9%.)

Also heartening for hospitality workers, who have taken the brunt of the job losses, is that their employment increased considerably. Here’s the relevant paragraph of the press release:

Employment in leisure and hospitality increased by 592,000, accounting for about one-third of the gain in total nonfarm employment in July. Employment in food services and drinking places rose by 502,000, following gains of 2.9 million in May and June combined. Despite the gains over the last 3 months, employment in food services and drinking places is down by 2.6 million since February. Over the month, employment also rose in amusements, gambling, and recreation (+100,000).

I have pointed out how much better the numbers would be if a bipartisan majority in Congress had not, in March, legislated a $600 per week unemployment benefit on top of normal state benefits. That benefit expired last Friday. If Congress does not renew that benefit, I expect an even bigger increase in August, which would be reported on September 4. I also expect, however, that Congress will renew a modified version of this benefit.

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The Fantastic Unemployment Numbers!

 

Possibly because of the long weekend and possibly because the unemployment numbers don’t make Donald Trump look bad, there hasn’t been as much commentary as I had expected on the June unemployment numbers.

Here’s mine: They are fantastic!

Here’s the BLS release.

Now for some highlights.

Nonfarm payroll employment rose by 4.8 million in June. I’m not sure  but I’m pretty sure that this is a record increase. The previous, month, May, it was a whopping 2.5 million. So June’s number is almost double May’s increase.

The unemployment rate fell from 13.3 percent in May to 11.1 percent in June, a drop of 2.2 percentage points.

The number of people unemployed fell by a whopping 3.2 million. I think that’s a record drop also.

The labor force participation rate rose by 0.7 percentage point.

The employment to population ratio rose by 1.8 percentage points.

In thinking that the major recovery would not start until the added $600 per week federal unemployment ended (it ends at the end of July), I was too pessimistic.

I do think, though, that if Congress had not passed that benefit in March and had Donald Trump not signed the legislation, the unemployment rate today would be in high single digits, not low double digits.

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