July Jobs Numbers Show Economic Impact of Coronavirus Policy Reversals
CEI labor policy expert Sean Higgins breaks down what the jobs numbers from July are telling decision makers:
“The most recent jobs numbers from the Labor Department are a classic case of ‘Yes, but…’ Yes, things are getting better, but they’re not improving at the rate we need them to as a country. An unemployment rate of 10.2 percent is better than previous months and exceeded expectations. But we are still far below where we were in February and, if anything, the pace appears to be slowing.
“It is hard to see this as anything other than a consequence of the decision by many states over the summer to slam the breaks on re-openings and reverse course. Public safety remains paramount, but we cannot kid ourselves about the cost of these actions and the long-term consequences in terms of added debt, loss of productivity, and pushing people out of the workforce. We’re in a hole and we just keep digging.
“The overall unemployment rate is up 6.7 points from February and we still have 10.6 million fewer jobs than we started out with this year. The labor force participation rate remained stuck at 6.4 percent. Last month’s increase in work came solely from part time jobs, which were up 803,000, while full-time work remained mostly unchanged.
“The surprisingly strong numbers of previous months show that people are eager to get back to work and business owners are eager to welcome customers back. Instead, people are growing discouraged. The number of people not working but looking for jobs declined to 463,000 over the last month, and now stands at 7.7 million overall.
“Another worrisome sign is that the growth is not happening in the right places. One of the largest areas of growth was in government, which rose by 301,000 in the last month. However, employment in manufacturing and construction was largely unchanged. Hospitality was a bright spot, adding 592,000 jobs in the last month, reflecting the fact that people are finally emerging from their homes and going to restaurants and re-engaging in other activities that lapsed for months. But we are still down 2.6 million jobs since February.
“It is unclear, too, how much work is being done. ‘[W]orkers who are paid by their employer for all or any part of the pay period including the 12th of the month are counted as employed, even if they were not actually at their jobs,’ according the department. So, the ‘employed’ part only reflects those earning checks even if they’re left idle through no fault of their own.“