In contrast to the gloom that has hovered over the economy since the coronavirus pandemic began, the nation’s employment status actually improved in May, according to the jobs report released today. The unemployment rate dropped to 13.3%, and 2.5 million jobs were added to payrolls. That means April’s unemployment rate, 14.7%, remains the highest since the Bureau of Labor Statistics started tracking monthly employment data.
The employment increase is credited to “limited resumption of economic activity” in May as states and municipalities began to reopen in the wake of shutdowns aimed at containing the spread of the coronavirus, according to the BLS report. Among industries that saw employment gains were hospitality and retail.
But while this report seems optimistic at first glance, it does not mean that our or employment and economic worries are over.
“We still need to step back and remember that the unemployment rate remains higher than the peak during the financial crisis and great recession,” said Mark Hamrick, senior economic analyst at Bankrate, said.
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The unemployment rate prior to the start of the pandemic was below 4%. And even during the worst point of the recession 10 years ago, it hovered at almost 10%.
“Still, the solid rebound suggests that investors who bid up stock prices in recent weeks were correct in an anticipating solid improvement. Whether those levels will be sustained remains to be seen,” Hamrick said.
Hamrick pointed out that 15 million unemployed Americans believe they’re only out of work temporarily. If furlough periods end as anticipated and rehiring efforts take place quickly, we may see additional gains in the data in June and July.
But that will all depends on continued containment of the coronavirus during a time when many people are antsy to get back into daily life and even to begin traveling again.
Another area worth a look, but for less optimistic reasons: unemployment by race. Much of the decline in the unemployment rate in May came from white employment.
The Washington Center for Equitable Growth pointed out that black unemployment actually increased slightly, from 16.7% to 16.8%. Hispanic unemployment decreased from a whopping 18.9% to 17.6%.
Meanwhile, the white unemployment rate dropped from 14.2% to 12.4%.
So no, this is not the recovery we were all quietly hoping for. We’re not there yet. Thirty million people have filed for unemployment during the pandemic shutdowns, and many of them are still waiting to receive those weekly benefits, even as they also wait to learn the fate of the jobs they lost.
True economic recovery won’t begin until those people who have faced income gaps this spring are able to shore up their own financial situations and get back into the workforce.
And even then it’s going to be a long road to nudge that unemployment rate back down to a level that indicates relative economic stability, rather than serving as a constant reminder that we’re still facing several crises at once.
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