- The May unemployment rate was put at 13.3% after the economy added 2.5 million jobs for the month
- Economists cautioned against reading too much into the numbers and noted most of the new jobs were “low quality,” may less than the mean $840 a week
- Presumptive Democratic president nominee Joe Biden said Trump is wrong in saying the company has come “through the pandemic”; rather, he said, we still “are in its thralls”
President Trump hailed Friday’s May unemployment report as an indication the coronavirus recession has run its course, saying the U.S. economy was poised to recover like a “rocket ship.” Economists, however, remain cautious about drawing such conclusions based on better-than-expected figures.
The Bureau of Labor Statistics reported the May jobless rate fell to 13.3% from 14.7% in April. The drop was a surprise to economists, who had predicted a loss of an additional 8 million jobs that would push the unemployment rate to 20%. Instead, BLS said the economy gained 2.5 million jobs as states began reopening economies that had been shut down since mid-March when the coronavirus pandemic began taking hold.
“This is better than a V[-shaped recovery],” Trump said from the White House Rose Garden. “This is a rocketship. This is wonderful. … This was the greatest recovery in history.”
Democratic nominee Joe Biden said Trump’s remarks were tone deaf to the millions of Americans who have lost their jobs and remain on unemployment rolls.
“I was disturbed … to see the president crowing this morning — basically hanging a ‘mission accomplished’ banner when there is so much work to be done — and so many Americans are still hurting,” Biden said in response. “More than 20 million Americans — one out of every seven U.S. workers — are still out of work.”
And, indeed, the jobless rate may even be 3 percentage points higher than indicated by Friday’s report. In a note at the bottom, BLS says tens of thousands of workers may have been misclassified, listing themselves as absent from work for “other reasons” rather than laid off, and thereby being counted as employed.
“BLS and the Census Bureau are investigating why this misclassification error continues to occur and are taking additional steps to address the issue,” the report said. The same was true of the March and April reports, putting those jobless rates more likely at 5.4% and 19.7%, respectively, rather than the reported 4.4% and 14.7%.
Cornell University’s Private Sector Job Quality Index indicated the vast majority of the jobs created last month (83.47%) were low quality, paying less than the mean weekly wage of $840.50. About half the new jobs were at food services and drinking establishments.
University of Chicago economist Austan Goolsbee, former chairman of the Council of Economic Advisers, said May’s report was more like a “dead [cat] bounce.”