Shaky economic data portend a shaky recovery | TheHill

Shaky economic data portend a shaky recovery | TheHill

The May jobs report issued by the Bureau of Labor Statistics on Friday contained quite a surprise. In the midst of the pandemic, the unemployment rate actually decreased from April’s 14.7 percent to 13.3 percent. That sounds like good news. Two factors could explain the unexpected improvement. The first is the easing of stay-at-home orders in several states, most notably Texas and Florida. The second is the growing use of the Paycheck Protection Program, which provides loans to companies that pledge to retain most or all of their workers. The good news looks even better when one looks at the details. One might have expected employment to rebound noticeably in areas directly clobbered by the crisis, such as leisure and hospitality, retail and construction. These are the sectors that should benefit from easing restrictions and the PPP. But the uptick in employment went beyond that: Manufacturing employment, along with education and health, ticked upwards as well. At the same time, the data come with a greater-than-usual level of uncertainty. In its press release, the Bureau of Labor Statistics provide a whole page of explanation of the unusual obstacles they faced in collecting data. Because of the pandemic, the BLS was not able to conduct its usual face-to-face interviews, and it had to operate with somewhat limited staff in its four regional data collection centers. Due to this, the survey response rate was “slightly lower” than usual for establishments (businesses) and 15 percentage points lower (67 percent versus 82 percent) for households. Perhaps ...
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