
May sees biggest jobs increase ever - drocer88
https://www.cnbc.com/2020/06/05/jobs-report-may-2020.html
======
nerdponx
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
CNBC has some analysis on what jobs were created at :
[https://www.cnbc.com/2020/06/05/record-job-gains-heres-
where...](https://www.cnbc.com/2020/06/05/record-job-gains-heres-where-the-
jobs-are-in-one-chart-may-2020.html)

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.

------
adventured
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-
instantvie...](https://www.reuters.com/article/us-canada-economy-
instantview/canada-adds-net-289600-jobs-in-may-idUSKBN23C1QV)

~~~
kthxbye123
Name one

~~~
adventured
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.

------
dcolkitt
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
But we are 10 years into a bull cycle. Shouldn't we see a recession soon
regardless of COVID?

~~~
dcolkitt
There's not really any evidence that bull markets die of old age.[1] For
example prior to 2020, Australia had 29 years of robust economic growth
without a recession.[2]

[1] [https://www.cnbc.com/2018/03/07/bull-runs-dont-die-of-age--
t...](https://www.cnbc.com/2018/03/07/bull-runs-dont-die-of-age--this-one-can-
continue-says-strategist.html) [2]
[https://edition.cnn.com/2020/06/03/economy/australia-
recessi...](https://edition.cnn.com/2020/06/03/economy/australia-
recession/index.html)

------
SigmundA
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...](https://www.bls.gov/cps/employment-situation-covid19-faq-may-2020.pdf)

~~~
adventured
> Seems to good to be true

It's not too good to be true. Canada had an unexpected, very positive report,
they're 1/9th the size of the US and the economies are very tightly linked;
their data indicated 289,000 job gains. Can you explain that, is Canada faking
their numbers dramatically?

"Canada added a net 289,600 jobs in May, with most of the employment gains
coming in full time, Statistics Canada said on Friday. The rebound in May
hiring comes after Canada lost a record-breaking 2 million jobs in April."

~~~
SigmundA
Who said the numbers are faked, whats your explanation of what I posted? We
are talking 10 times the amount of the same time last year.

Perhaps Canada has the same issue in "workers with a job but not at work"
being misclassified?

------
4636760295
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
I wonder if this number includes employees who were "furloughed" but not
actually let go, whose furloughs have ended.

~~~
4636760295
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.

------
alkibiades
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

