2020-07-06
Latest Unemployment Report: Great News…for the Most Part

Latest Unemployment Report: Great News…for the Most Part | MyKCM

The Bureau of Labor Statistics (BLS) released their latest Employment Situation Summary last Thursday, and it again beat analysts’ expectations in a big way. The consensus was for 3,074,000 jobs to be added in June. The report revealed that 4,800,000 jobs were added. The unemployment rate fell to 11.1% from 13.3% last month. Again, excellent news as the unemployment rate fell for the second consecutive month. However, there’s still a long way to go before the economy fully recovers as 17.8 million Americans remain unemployed.

Here are two interesting insights on the report:

What about a supposed misclassification?

The BLS addressed this at length in a blog post last week, and concluded by saying:

“Regardless of the assumptions we might make about misclassification, the trend in the unemployment rate over the period in question is the same; the rate increased in March & April and eased in May.”

They specifically noted the issue in the latest report by explaining that if they adjusted the rate for the potential miscalculation, it would increase from 11.1% to 12.1% (which is lower than the adjusted rate of 16.4% last month). They went on to say:

“However, this represents the upper bound of our estimate of misclassification and probably overstates the size of the misclassification error.”

Does the shutdown of parts of the economy skew the unemployment numbers?

Because the uniqueness of 2020 impacts the employment situation in so many ways, each jobs report is now examined with a microscope to make sure the headlines generated by the report accurately convey what’s happening in the job market.

One such analysis is done by Jed Kolko, Chief Economist at Indeed. He believes the extraordinary number of people in the “temporary” unemployed category confuses the broader issue of how many people have permanently lost their job. He adjusts for this when calculating his “core unemployment rate” (which subtracts temporary layoffs and adds unemployed who didn’t search for a job recently).

The bad news is that his analysis reveals that the number of permanently unemployed is still rising (from 4.6% in April to 5.9% last month). The good news, however, is when you use his methodology to look back at the Great Recession, today’s “core unemployment rate” is significantly lower (5.9% versus 10.5% in April 2010).

Bottom Line

Last week’s jobs report was much better than most expected. However, we should remain cautious in our optimism. As the Wall Street Journal explained in their analysis of the jobs report:

“U.S. job growth surged last month, underscoring the economy’s capacity for a quick rebound if businesses continue to reopen and consumers regain confidence. A recent coronavirus spike, however, could undermine trends captured in the latest jobs report.”

Welcome to our Blog!
2020-09-19
Is Now a Good Time to Move Sarasota?

2020-09-14
Two New Surveys Indicate Urban to Suburban Lean

2020-09-10
Sarasota Homebuyer Traffic Is on the Rise

2020-09-09
The Latest Unemployment Rate Fell to 8.4%

2020-09-08
Have You Ever Seen a Housing Market Like This?

2020-09-04
FSBO Millionaires Use Real Estate Agents

2020-09-03
Sarasota Homebuyer Demand Is Far Above Last Year’s Pace

2020-09-02
How Will the Presidential Election Impact Sarasota Real Estate?

2020-09-01
It’s Not Just About the Price of the Home

2020-08-31
Three Ways to Win in a Sarasota Home Buying Bidding War

2020-08-27
Why Is It so Important to Be Pre-Approved in the Homebuying Process?

2020-08-27
Here’s how to know if you’re ready to sell your Sarasota home!

2020-08-26
July 2020 Sarasota Housing Report

2020-08-26
Should You Buy an Existing Sarasota Home or New Sarasota Construction?

2020-08-25
Builders & Realtors Agree: Sarasota Real Estate Is Back

2020-08-24
The Top Reasons People Are Moving This Year

2020-08-21
How the Sarasota Housing Market Benefits with Uncertainty in the World

2020-08-21
Fix It Up Friday

2020-08-20
Forbearance Numbers Are Lower than Expected

2020-08-19
Just How Strong Is the Sarasota Housing Recovery?

2020-08-18
Sellers Are Returning to the Sarasota Housing Market

2020-08-18
Let It Go! 8 Seller Beliefs That No Longer Hold True Today!

2020-08-17
The Beginning of an Economic Recovery

2020-08-14
Florida's Single Family For-Sale Inventory Hits Record Low in 2Q

2020-08-13
Sarasota Homes Are More Affordable Right Now Than They Have Been in Years

Click here to see ALL articles.




Comment on this Article

Your Name:
Your Email:
Comments:
Verify:  Please enter the numbers shown to help eliminate spam.