Latest Unemployment Report: Great News…for the Most Part

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.”

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

Webinar: RENT CONCERNS TENANT RIGHTS & REMEDIES DURING THE PANDEMIC

Hello all,

As you go into your conversations with your landlords and or tenants, remember to keep your conversations Often, Open and Honest. We are all in the same boat and it will be cooler heads that come out successful on the other side.

Please listen to this webinar. It is a discussion with Matt Sullivan and Deanne R. Stodden of Messner Reeves, LLP. They both work with the Colorado Restaurant Association but this advice applies to all small businesses with a lease.

Click Here For Webinar

Below is an outline of what they are talking about. Print it out and make notes.

Click Here For Discussion Outline

If you need help or just a sounding board. Please call.

Stay Healthy and Safe,

Mike

Colorado Small Business Development Council Webinar 3/31

Webinar: How to Apply for SBA Disaster Loan Assistance:

This will be good information. Follow the link to register.

CLICK HERE

Why we are here...

So yesterday I had one of those days that remind you why you are here...A day by myself, on the hill under a bluebird sky. It was warmer than it had been and the faces were soaking up the sun. Smiles all around :)

I love days like this because I make it a point to interact with people on the chairlifts. You never know who you are sitting next to. Yesterday I was riding with a family that was from the Netherlands, but now living in Chicago...They were speaking Dutch but when they spoke English, the kids had a thick Chicago accent. Ha... It was their first time in Snowmass, They usually just take the train to the Swiss Alps...Yeah Life.

So sipping my morning coffee, today, I came across this article. It is worth a read. It shows how special this place is. How inspiring it can be, if you just put one foot in front of the other.

Now all of these people are in the elite athlete category, that is certainly not all of us. But each of them talk about when they were starting their journey and who they met, that inspired them.

We live in a special place, so get out there...mix it up with other people. You never know who might be on that chair lift with you.

Mike.

Thank you @ericarobbie for the great article, that provided me with a little early morning inspiration :)

Experts among us: The elite athletes of the Roaring Fork Valley