Moneybox

Beware Anyone Touting Thursday’s Monster Jobs Report

Especially you-know-who.

A waiter stands behind a seated dinner putting hand sanitizer on his hands, while wearing a mask.
A waiter at Mon Ami Gabi, a French restaurant in Bethesda, Maryland, uses hand sanitizer and wears a protective face mask as they serve customers outdoors amid the coronavirus pandemic on June 12. Sarah Silbiger/Getty Images

The most important thing to keep in mind about Thursday’s monster jobs report is that it’s a backward-looking window into the moment right before much of the country’s reopening plans went completely to hell.

Employers officially added a record 4.8 million workers to their payrolls last month, and the unemployment rate dipped to 11.1 percent, the Bureau of Labor Statistics announced Thursday morning. The huge number prompted another celebratory press conference at the White House, during which Donald Trump said the country was “coming back faster, bigger, and better than we ever thought possible.” But those speedy gains were made between the middle of May and the middle of June, a period during which many states hastily allowed businesses like restaurants, bars, and movie theaters to reopen in an attempt to jump-start their coronavirus-ravaged economies. More than 2 million people went back to work in leisure and hospitality alone.

We all know what happened next. The U.S. is now seeing record daily cases as COVID-19 has surged all across the Sun Belt, forcing states like Texas, California, and Arizona to once again close down their drinking holes and limit indoor dining and other risky activities. After a unprecedented economic catastrophe, the country quickly added back a lot of jobs in part by disregarding risks to public health. Having hitting the gas pedal quickly, governors are being forced to put the brakes on their plans in order to avoid accidentally driving off a cliff.

Republicans in Congress and the White House have been rooting for a fast jobs recovery because they want the economy and American life more generally to get back to normal before the November election, despite Trump’s abject failure to contain the virus. The GOP also wants to limit the size of the next coronavirus relief package, which lawmakers are expected to negotiate this month. They would especially like to cut back on the $600-per-week unemployment benefits that the jobless are relying on, in part because they think that will speed people’s return to work. And according to the Washington Post’s Jeff Stein, the administration believes Thursday’s jobs report will help their cause.

But the new wave of cases and reclosings across the country should raise obvious suspicion about whether the country will continue to add jobs at the overall rate it did during May and June. There are plenty of reasons for doubt in the economic data as well. While the headline unemployment rate fell in June, the number of Americans who had permanently lost their jobs, and were not just on a temporary layoff, rose. Private sector figures on small business activity suggest that their recovery has started to taper off. Meanwhile, millions of Americans are continuing to file for unemployment insurance every week, which implies major layoffs are still happening. Also Thursday, the Department of Labor reported that the number of Americans on the jobless rolls actually ticked up between the weeks ending June 13 and June 20.

Using June’s jobs gains as an excuse to cut unemployment payments now is also a bit illogical. After all, what they mostly show is that businesses didn’t have much trouble rehiring workers. The ability to collect a generous government check simply didn’t stop 4.8 million Americans from going to back work. (Notably, even before the new numbers came out, economists had failed to find any evidence that souped-up UI payments were hindering hiring.) Meanwhile, the aid has kept families from falling into poverty and allowed them to keep spending. There’s simply no obvious reason to kick the crutches out from under the economy before it’s clearly capable of moving on its own, and risk plunging people who can’t go back to work into desperation.

Thursday’s jobs numbers are nothing to get overly excited about. Rather, they show the limits of trying to revive the economy in the midst of an unchecked pandemic: Even as millions went back to work, many millions more still remained unemployed, since many businesses could still only partially function. And the virus came roaring back anyway, forcing states to put their reopening plans on hold. Those results are certainly not a reason to take away the aid from the people who are clearly going to need it.

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