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Issue #1923      July 13, 2020

BLS jobs report shows US employment crash continues

Donald Trump’s happy talk today notwithstanding, the nation’s current depression, the employment crash caused by closures forced by the coronavirus pandemic, continues, the latest Bureau of Labour Statistics (BLS) report shows.

That’s because 1.445 million more people applied for regular state unemployment benefits, and another 839,563 sought special federal benefit checks in the week ending 27th June.

The overall US unemployment rate for June dropped to 11.1 per cent, another BLS report says. It adds businesses claimed to create 4.8 million new jobs that month. Both reports were released 3rd July, but the regular June jobs report includes only data through 12th June.

That makes it out of date. It’s also understating joblessness, top economists said the day before, as workers who “are on temporary layoff but still paid” – due to federal aid – are not counted as jobless.

And the 4.8 million jobs businesses claimed to create in June as they started to reopen are those whose workers could be easily called back first, and who just as easily be laid off again as the coronavirus pandemic resurges. Such layoffs are already starting.

The more-up-to-date weekly report showed 19.2 million people received regular state unemployment benefits as of 27th June. Numbers covering other benefits, from the federal government only – including 749,000 people who get just $600 weekly federal checks – went to 13.603 million other people in the week ending 13th June. The federal numbers always lag a week or two behind state data.

“The total number of people claiming benefits in all programs for the week ending 13th June was 31,491,627, an increase of 916,722 from the previous week,” that weekly benefits claims report says.

The economists warned the roof could fall in at the end of July unless Congress again extends jobless benefits, including weekly $600 checks to “independent contractors,” musicians and other workers who don’t qualify for state jobless aid. Extension is up in the air, Rep. James Clyburn, D-S.C., a member of the House leadership and chair of the select committee on the coronavirus, said the day before.

“There’s another round of layoffs that are likely to occur as businesses that opened up are then likely to cut back” due to a resurgence of coronavirus pandemic, AFL-CIO chief economist Bill Spriggs said in that same telephone press briefing.

Those cuts are starting. Delta Airlines earlier asked forty per cent of its 90,000 workers to go on unpaid furloughs for up to a year, and Gov. Gavin Newsom, D-Calif., faced with rising coronavirus figures in the Golden State, ordered more business closures on 2nd July.

The bad numbers in the more up-to-date weekly claims report didn’t stop the GOP Trump regime from crowing about the drop in the monthly unemployment report but made Trump’s comeback claims a lie.

And even the better-looking monthly data showed weakness: Almost half (2.1 million) of those 4.8 million “new” jobs were in reopening bars, hotels and especially restaurants – all firms now forced to close again to combat the resurgent coronavirus. BLS reported on 1st July that all 389 US metro areas lost jobs in May.

Those workers who returned came back to shorter workweeks and lower pay. “In June, average hourly earnings for all employees on private nonfarm payrolls fell by 35 cents to $29.37,” BLS said in the monthly jobs report and the workweek declined by 0.2 hours, to 34.5 hours.

That earnings drop “reflects job gains among lower-paid workers; these changes put downward pressure on the average hourly earnings,” BLS said. The big job gains in the private sector were among the lowest-paid workers: Restaurant workers, temps, and janitors.

That decline may understate the case. A University of Chicago business school study, commissioned by the Washington Post, found four million workers who have kept their jobs through the crash have had their pay cut, too.

“We’re in two recessions,” Spriggs said. One is a “normal cyclical recession” after joblessness hit a low of 3.5 per cent in March, before the virus’s impact hit home. The other and larger one is of people laid off due to the campaign to enforce social distancing and prevent the virus’s spread, he explained. Those layoffs total 31.491 million from the March start of the pandemic through 13th June, the BLS weekly jobless claims report said.

The reopenings have spread the coronavirus again. Analysis shows the number of new coronavirus cases in June was fifty per cent higher than the number of new cases in May. June is when the reopenings began.

“We may see more losses in future months due to the coronavirus,” Spriggs added, especially in state and local governments. BLS’s monthly jobs report said those governments shed 1.9 million jobs in April and May and added only 33,000 in June. There were 70,000 more jobs in local schools and losses in other governments.

People’s World

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