The good news is the labor market was not as bad as most economists predicted during the month of May, but the bad news is this may be about where things stabilize with semi-permanent high unemployment.
Trump more or less declared victory this morning because the Labor Department's monthly report was better than expected with the economy adding 2.5 million jobs, but those aren't "new" jobs. Nearly 2 million of the total was driven by the restaurant and dental industries returning to the jobs they had before the coronavirus pandemic necessitated a lockdown.
Underlying the top-line numbers, state and local governments continued to cut jobs and -- a statistic that is particularly relevant to our current moment in time -- black unemployment increased while white unemployment decreased.
The 16.8% rate for black Americans topped that for white Americans, which ticked down to 12.4% last month, according to a report published Friday by the Bureau of Labor Statistics. The highest rate was among Latino workers, 17.6% of whom reported being unemployed. [...]
The significant job losses during the pandemic have pushed the overall ratio of Americans with a job to just above 50%. For black Americans, that number is now below 50%.
There is a correlation between continued cuts at the state and local level and the rising rate of black unemployment. Moreover, there's a correlation between the congressional Republican refusal to pass another stimulus bill that includes funding for state and local governments and the rising rate of black unemployment. That's also true of the Trump-led effort to bankrupt the United States Postal Service (USPS) where employment has offered a pathway to a middle class life for black Americans for generations. None of these things are a coincidence.
Although the May jobs report was better than expected overall, economists say we could be looking at a long recovery period.
“The country has turned the corner from the pandemic and the recession it created for now, but all the workers who lost their paychecks will find it difficult to regain their place in society as many of these jobs are gone forever,” said Chris Rupkey, chief economist at MUFG in New York.
“It took years for the economy to grow enough to find jobs for those unemployed in the last recession, and it will take years again this time to do the same.” [...]
Despite last month’s surprise increase, payrolls are nearly 20 million below their pre-COVID-19 level. The unemployment rate has risen 9.8 percentage points and the number of unemployed is up 15.2 million since February.
My biggest concern is that Republicans will point toward today's report and say it's a sign that we don't need to pass more stimulus.
In the very short term that probably makes political sense to them, but in the long term it will prolong the recovery and hamper the next administration. And maybe that's the point.
Mitch McConnell's lizard brain is probably thinking he'd like to see things improve enough to help him but not enough to help Joe Biden next year or the following three years.