8 ms·

May sees biggest jobs increase ever

39 points by drocer88 6y ago

4636760295 6y ago
Not surprising, most of the layoffs were probably temporary. Restaurant staff for example will be quickly re-hired as things open back up, and hourly wage earners make up the bulk of people who were laid off.
- nerdponx 6y ago
  I wonder if this number includes employees who were "furloughed" but not actually let go, whose furloughs have ended.
  - 4636760295 6y ago
    I'm curious as well. I'm not entirely sure what the difference is from a legal perspective, it would be interesting to hear from someone who knows.
nerdponx 6y ago
Missing from the article, as always, is an analysis of what those jobs are. Are they comparable to the jobs that existed before? Are they lower-paying or higher-paying? What kinds of employers are opening up new jobs? What sectors? How many hours a week? How many unique employers are adding jobs? Are they new companies or existing companies? Etc. Obviously not all of this data is available or even obtainable. But that one number by itself -- total nonfarm payroll -- is an extremely coarse measurement of the state of the economy, and we need to stop acting like all jobs are created equal. This is precisely what gave us the "false recovery" of the early 2010s. Politicians looked at headline unemployment and said "great, recession over!" meanwhile people were looking at their wallets and wondering when exactly the recession ended. Edit: As a result of this politician-public misalignment, policy was made assuming that things were "back to normal", allowing the practical effects of the recession to linger for years longer than they needed to. Arguably this is what sowed the seeds for the 2016 election of Donald Trump and the rise of anti-intellectualism across the USA.
- fdye 6y ago
  CNBC has some analysis on what jobs were created at : https://www.cnbc.com/2020/06/05/record-job-gains-heres-where-the-jobs-are-in-one-chart-may-2020.html https://www.cnbc.com/2020/06/05/record-job-gains-heres-where... Looks like vast majority were in hospitality. Unfortunately, the warning sign is ~-500K in government sector. One of the major things that drew out the last recession was a significant decline in jobs for government employees month to month as tax revenue dried up. While at this point any good news is welcome. The fact we are seeing an increase in hospitality, which typically are hourly with little/no benefits, for government jobs, which typically are more professional with good benefits, should be worrying. My non-expert analysis thinks it means the COVID-19 recession is becoming more systemic.
dcolkitt 6y ago
I think this is pretty good evidence that we're likely to see a rapid V-shaped recovery. The recession will be be deep, but it's unlikely to be prolonged. There's no fundamental reason we can't simply roll back the clock to Q4 2019. Most business cycles are different, because they involve the accumulation of mal-investment during the exuberance of the late-stage expansionary phase. During the boom people make a lot of bad decisions. In 2007 people were allocating way too much capital to housing and the banking sector. In 1999 they were investing in Pets.com and Enron. In 1980, existing business models could not handle the rise of rates from 8% to 16%. In many ways the hardest part about recovering from a recession is for the economy to figure out how to climb back to its pre-recession GDP highs, without falling into the same pitfalls from before. That necessarily involves a period of learning and trial, which makes it a long process. However this recession is very different. It wasn't caused by speculation or malinvestment in the expansionary phase. It was caused by a totally exogenous shock to the economy. Once you remove that shock, there's no reason that GDP shouldn't snap back to its previous peaks.
- nickfromseattle 6y ago
  But we are 10 years into a bull cycle. Shouldn't we see a recession soon regardless of COVID?
  - adventured 6y ago
    If you have the Fed artificially buffering the expansion & recession forces (as we have, with their zero rates forever, QE infinite), you could see a slow overall rate of growth stretched out over a long period of time instead of a sharp & brief recessionary contraction and sharp bounce back as typical in the past. Their never-ending stimulus may smooth out that expected event. In that scenario, the only thing likely to cause a meaningful recession is an (perhaps inevitable) epic asset bubble popping, from some very high price point that gets so high in a parabolic run that it's unsustainable even if pumped by 0% Fed rates (think Bitcoin crashing down from the rapid run toward $20k or the last quarters of the dotcom bubble run).
  - anm89 6y ago
    It took me a long time to swallow this pill but these things are arbitrary when they are up against certain levels of intervention. Gravity is real and this bubble will crash and it will be catastrophic but they could inflate and reinflate this bubble for decades if the macro environment cooperates. You really can't time or predict this stuff.
adventured 6y ago
I'm fascinated by how many people are upset about this good news. I wonder what their motivation could be. It's confirmed by a big surprise in positive jobs in Canada for May as well: https://www.reuters.com/article/us-canada-economy-instantview/canada-adds-net-289600-jobs-in-may-idUSKBN23C1QV https://www.reuters.com/article/us-canada-economy-instantvie...
- kthxbye123 6y ago
  Name one
  - adventured 6y ago
    Most of this thread: https://news.ycombinator.com/item?id=23428326 https://news.ycombinator.com/item?id=23428326 HN has been posting and upvoting dreadful reports on job losses and economic destruction for weeks. Now there is a massive positive event and HN is disinterested and cynical about it, maybe even outright hostile (look at the vote vs comment ratio, a tell). Obviously some prefer a lockdown forever strategy.
SigmundA 6y ago
Seems to good to be true, and in the FAQ starting page 9 there is some interesting info: In May 2020, 5.4 million people were included in the “other reasons” category—about two-thirds of the total 8.4 million employed people not at work during the survey reference week (not seasonally adjusted). This is lower than the 8.1 million people not at work for “other reasons” in April, but was substantially higher than the average of 549,000 for May in recent years. As in April, BLS analysis of the underlying data suggests that this group included workers affected by the pandemic response who should have been classified as unemployed on temporary layoff. Such a misclassification is an example of nonsampling error and can occur when respondents misunderstand questions or interviewers record answers incorrectly. BLS and the Census Bureau are investigating why this misclassification error continues to occur and are making changes for the June collection. And 13. Household survey: What would the unemployment rate be if these misclassified workers were included among the unemployed? If the workers who were recorded as employed but not at work for the entire survey reference week had been classified as “unemployed on temporary layoff,” the overall unemployment rate would have been higher than reported. This kind of exercise requires some assumptions. For example, first one needs to determine how many workers might be misclassified. There were 5.4 million workers with a job but not at work who were included in the “other reasons” category in May 2020, about 4.9 million higher than the average for May 2016–2019. (While this category contains misclassified workers, not every person in this category was necessarily misclassified. The average for recent May estimates was 549,000 employed people with a job not at work for “other reasons.”) One assumption might be that these additional 4.9 million workers who were included in the “other reasons” category should have been classified as unemployed on temporary layoff. If these workers were instead considered unemployed on temporary layoff, the number of unemployed people in May (on a not seasonally adjusted basis) would increase by 4.9 million from 20.5 million to 25.4 million. The number of people in the labor force would remain at 158.0 million in May (not seasonally adjusted) as people move from employed to unemployed but stay in the labor force. The resulting unemployment rate for May would be 16.1 percent (not seasonally adjusted), compared with the official estimate of 13.0 percent (not seasonally adjusted). Estimates of people with a job but not at work are not available on a seasonally adjusted basis, so seasonally adjusted data, such as the unemployment rate mentioned in The Employment Situation news release, are not used in this exercise. (Repeating this exercise, but combining the not seasonally adjusted data on additional people with a job but not at work in the “other reasons” category with the seasonally adjusted estimates reported in The Employment Situation news release yields a similar 3.1 percentage point increase in the unemployment rate for May—or 16.4 percent, compared with the official seasonally adjusted rate of 13.3 percent.) https://www.bls.gov/cps/employment-situation-covid19-faq-may-2020.pdf https://www.bls.gov/cps/employment-situation-covid19-faq-may...
alkibiades 6y ago
sad how many people want this number to be wrong and want suffering because they hate the president so much. this should be the top post on the site right now

39 points by drocer88 6y ago

Not surprising, most of the layoffs were probably temporary. Restaurant staff for example will be quickly re-hired as things open back up, and hourly wage earners make up the bulk of people who were laid off.

nerdponx 6y ago
I wonder if this number includes employees who were "furloughed" but not actually let go, whose furloughs have ended.
- 4636760295 6y ago
  I'm curious as well. I'm not entirely sure what the difference is from a legal perspective, it would be interesting to hear from someone who knows.

nerdponx 6y ago

Missing from the article, as always, is an analysis of what those jobs are. Are they comparable to the jobs that existed before? Are they lower-paying or higher-paying? What kinds of employers are opening up new jobs? What sectors? How many hours a week? How many unique employers are adding jobs? Are they new companies or existing companies? Etc. Obviously not all of this data is available or even obtainable. But that one number by itself -- total nonfarm payroll -- is an extremely coarse measurement of the state of the economy, and we need to stop acting like all jobs are created equal. This is precisely what gave us the "false recovery" of the early 2010s. Politicians looked at headline unemployment and said "great, recession over!" meanwhile people were looking at their wallets and wondering when exactly the recession ended. Edit: As a result of this politician-public misalignment, policy was made assuming that things were "back to normal", allowing the practical effects of the recession to linger for years longer than they needed to. Arguably this is what sowed the seeds for the 2016 election of Donald Trump and the rise of anti-intellectualism across the USA.

fdye 6y ago
CNBC has some analysis on what jobs were created at : https://www.cnbc.com/2020/06/05/record-job-gains-heres-where-the-jobs-are-in-one-chart-may-2020.html https://www.cnbc.com/2020/06/05/record-job-gains-heres-where... Looks like vast majority were in hospitality. Unfortunately, the warning sign is ~-500K in government sector. One of the major things that drew out the last recession was a significant decline in jobs for government employees month to month as tax revenue dried up. While at this point any good news is welcome. The fact we are seeing an increase in hospitality, which typically are hourly with little/no benefits, for government jobs, which typically are more professional with good benefits, should be worrying. My non-expert analysis thinks it means the COVID-19 recession is becoming more systemic.

dcolkitt 6y ago

I think this is pretty good evidence that we're likely to see a rapid V-shaped recovery. The recession will be be deep, but it's unlikely to be prolonged. There's no fundamental reason we can't simply roll back the clock to Q4 2019. Most business cycles are different, because they involve the accumulation of mal-investment during the exuberance of the late-stage expansionary phase. During the boom people make a lot of bad decisions. In 2007 people were allocating way too much capital to housing and the banking sector. In 1999 they were investing in Pets.com and Enron. In 1980, existing business models could not handle the rise of rates from 8% to 16%. In many ways the hardest part about recovering from a recession is for the economy to figure out how to climb back to its pre-recession GDP highs, without falling into the same pitfalls from before. That necessarily involves a period of learning and trial, which makes it a long process. However this recession is very different. It wasn't caused by speculation or malinvestment in the expansionary phase. It was caused by a totally exogenous shock to the economy. Once you remove that shock, there's no reason that GDP shouldn't snap back to its previous peaks.

nickfromseattle 6y ago
But we are 10 years into a bull cycle. Shouldn't we see a recession soon regardless of COVID?
- adventured 6y ago
  If you have the Fed artificially buffering the expansion & recession forces (as we have, with their zero rates forever, QE infinite), you could see a slow overall rate of growth stretched out over a long period of time instead of a sharp & brief recessionary contraction and sharp bounce back as typical in the past. Their never-ending stimulus may smooth out that expected event. In that scenario, the only thing likely to cause a meaningful recession is an (perhaps inevitable) epic asset bubble popping, from some very high price point that gets so high in a parabolic run that it's unsustainable even if pumped by 0% Fed rates (think Bitcoin crashing down from the rapid run toward $20k or the last quarters of the dotcom bubble run).
- anm89 6y ago
  It took me a long time to swallow this pill but these things are arbitrary when they are up against certain levels of intervention. Gravity is real and this bubble will crash and it will be catastrophic but they could inflate and reinflate this bubble for decades if the macro environment cooperates. You really can't time or predict this stuff.

adventured 6y ago

I'm fascinated by how many people are upset about this good news. I wonder what their motivation could be. It's confirmed by a big surprise in positive jobs in Canada for May as well: https://www.reuters.com/article/us-canada-economy-instantview/canada-adds-net-289600-jobs-in-may-idUSKBN23C1QV https://www.reuters.com/article/us-canada-economy-instantvie...

kthxbye123 6y ago
Name one
- adventured 6y ago
  Most of this thread: https://news.ycombinator.com/item?id=23428326 https://news.ycombinator.com/item?id=23428326 HN has been posting and upvoting dreadful reports on job losses and economic destruction for weeks. Now there is a massive positive event and HN is disinterested and cynical about it, maybe even outright hostile (look at the vote vs comment ratio, a tell). Obviously some prefer a lockdown forever strategy.

SigmundA 6y ago

Seems to good to be true, and in the FAQ starting page 9 there is some interesting info: In May 2020, 5.4 million people were included in the “other reasons” category—about two-thirds of the total 8.4 million employed people not at work during the survey reference week (not seasonally adjusted). This is lower than the 8.1 million people not at work for “other reasons” in April, but was substantially higher than the average of 549,000 for May in recent years. As in April, BLS analysis of the underlying data suggests that this group included workers affected by the pandemic response who should have been classified as unemployed on temporary layoff. Such a misclassification is an example of nonsampling error and can occur when respondents misunderstand questions or interviewers record answers incorrectly. BLS and the Census Bureau are investigating why this misclassification error continues to occur and are making changes for the June collection. And 13. Household survey: What would the unemployment rate be if these misclassified workers were included among the unemployed? If the workers who were recorded as employed but not at work for the entire survey reference week had been classified as “unemployed on temporary layoff,” the overall unemployment rate would have been higher than reported. This kind of exercise requires some assumptions. For example, first one needs to determine how many workers might be misclassified. There were 5.4 million workers with a job but not at work who were included in the “other reasons” category in May 2020, about 4.9 million higher than the average for May 2016–2019. (While this category contains misclassified workers, not every person in this category was necessarily misclassified. The average for recent May estimates was 549,000 employed people with a job not at work for “other reasons.”) One assumption might be that these additional 4.9 million workers who were included in the “other reasons” category should have been classified as unemployed on temporary layoff. If these workers were instead considered unemployed on temporary layoff, the number of unemployed people in May (on a not seasonally adjusted basis) would increase by 4.9 million from 20.5 million to 25.4 million. The number of people in the labor force would remain at 158.0 million in May (not seasonally adjusted) as people move from employed to unemployed but stay in the labor force. The resulting unemployment rate for May would be 16.1 percent (not seasonally adjusted), compared with the official estimate of 13.0 percent (not seasonally adjusted). Estimates of people with a job but not at work are not available on a seasonally adjusted basis, so seasonally adjusted data, such as the unemployment rate mentioned in The Employment Situation news release, are not used in this exercise. (Repeating this exercise, but combining the not seasonally adjusted data on additional people with a job but not at work in the “other reasons” category with the seasonally adjusted estimates reported in The Employment Situation news release yields a similar 3.1 percentage point increase in the unemployment rate for May—or 16.4 percent, compared with the official seasonally adjusted rate of 13.3 percent.) https://www.bls.gov/cps/employment-situation-covid19-faq-may-2020.pdf https://www.bls.gov/cps/employment-situation-covid19-faq-may...

alkibiades 6y ago

sad how many people want this number to be wrong and want suffering because they hate the president so much. this should be the top post on the site right now