Trump Touts Improved Jobs Numbers, But Economists Warn Trouble Ahead in July

Sarah RumpfJun 5th, 2020, 12:03 pm
 

Two competing narratives emerged regarding the U.S. economy Friday morning: unemployment numbers dropped, to the delight of President Donald Trump, but the ongoing coronavirus pandemic and the looming expiration of benefits in July caused some economists to take a more pessimistic view.

The May jobs report showed that the unemployment rate had fallen to 13.3 percent, with 2.5 million jobs added. Trump posted a string of triumphant tweets and called a surprise press conference to tout the report.

This is a notable improvement over the April unemployment rate, which was a devastating 14.7%, the worst rate since the country started tracking monthly jobless numbers in 1948. The gradual reopening of the economy helped stave off the 20% rate that many economists had predicted.

The economy is still in a hole, however. 20.7 million jobs were eliminated in April alone, and the 2.5 million added back in May certainly helps but doesn’t dig us out entirely.

The May jobless rate of 13.3% is still higher than at any time during the Great Recession, and even that 13.3% figure was being disputed. As several observers have pointed out, a classification decision by the Board of Labor Statistics to not count those who were absent from work due to a temporary layoff meant that the rate was 3 points lower than it otherwise would have been.

According to CNN, the jobs gains were not enjoyed across the board. May unemployment for whites was 12.4%, Hispanics 17.6%, African-Americans 16.8%, and Asians 15%.

And of course, these numbers do not take into consideration the number of Americans who were rehired at their old jobs, but at reduced pay or reduced hours, or those who were able to find new employment but at a lower pay. The vast majority of the job gains were in fact with those who had been temporarily laid off and were able to return to their old jobs. Permanent job losses actually rose to 2.3 million, increasing by 295,000 in May.

One of the main ongoing concerns is what will happen later this summer. The Wall Street Journal’s Daily Shot blog characterized this issue as a “Looming Household Income Cliff,” noting the increased unemployment benefits (an extra $600 per month) were set to expire in July and funds from the stimulus checks (the $1,200 per person, $500 per child payments that were sent out) will be running out soon.

Paul Krugman was among many who opined that the positive numbers would discourage the White House from supporting any additional economic aid packages.

This concern gains validity from a comment Friday by White House economic adviser Stephen Moore, who said that the improved jobs numbers meant that “the sense of urgent crisis is very greatly dissipated” and there was “no reason to have a major spending bill” now.

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Sarah Rumpf - Contributing Editor

Sarah Rumpf joined Mediaite in 2020 and is a Contributing Editor focusing on politics, law, and the media. A native Floridian, Sarah attended the University of Florida, graduating with a double major in Political Science and German, and earned her Juris Doctor, cum laude, from the UF College of Law. Sarah's writing has been featured at National Review, The Daily Beast, Reason, Law & Crime, Independent Journal Review, Texas Monthly, The Capitolist, Breitbart Texas, Townhall, RedState, The Orlando Sentinel, and the Austin-American Statesman, and her political commentary has led to appearances on television, radio, and podcast programs across the globe. Follow Sarah on Bluesky and Threads.