Jobs Report Shows Gain, But Pessimism Still High Among Economists

( While the top-line numbers of June’s jobs report look promising, there are major underlying concerns, especially as the United States is facing its worst coronavirus outbreak yet.

The report, released Thursday morning by the U.S. Department of Labor, showed that the unemployment rate in the country fell to 11.1% in June, and employment increased by 4.8 million.

In a bubble, those numbers would be positive signs that the country is starting to return to work. As the BLS said in a release with the report, these job gains “reflect a partial resumption of economic activity that had been curtailed due to the coronavirus pandemic in April and March, when employment fell by a total of 22.2 million in the 2 months combined.”

But when economists take a step back and look at the big picture, they are worried about what may lie ahead. One of those people who are concerned is a former acting secretary of labor under former president Barack Obama, Seth Harris.

Harris pointed out this about the jobs report:

“The important thing to remember is that these numbers, the monthly jobs report numbers, are from several weeks ago, so they do not capture the re-closings that are happening in California, Texas, Florida and other states. They also don’t capture the fact that there is continuing layoffs.”

Indeed, another 1.4 million people in the country filed for first-time unemployment benefits last week. While that is significantly lower than the peak in late March, it’s still an awful lot of people to be newly out of work.

“We are going to have some cognitive dissonance,” Harris said. “Often, people look to the jobs report as an indicator of where we are going, but this jobs report more than anything is going to be a reminder of where we were and where we might have gone. But now the economy and the pandemic are heading in the opposite direction.

“The jobs report is going to be a piece of nostalgia from the world of three weeks ago, but we are in a different world today, which will be reflected in terms of the unemployment numbers.”

Indeed, the U.S. recorded its worst day of the coronavirus pandemic on Wednesday, with more than 50,000 new confirmed cases in the nation. The 50,203 new cases from Wednesday far surpassed the previous single-day record of 36,880, which was recorded just last week.

According to data compiled by Johns Hopkins University, the U.S. has recorded more than 2.5 million confirmed cases of coronavirus. Six states reported record-high numbers on Wednesday — California, Arizona, North Carolina, Texas, Tennessee and Georgia.

From an economic standpoint, 23 states have already changed their re-opening plans because of this recent surge in coronavirus. Some such as Texas have shut down bars again, while others such as New Jersey have paused the planned re-opening of indoor dining.

Economists worry that as the coronavirus spreads again, more and more states will force businesses to close, which will force more people onto unemployment for the first time — and some for the second time in only a matter of months.