DNC Chair Perez: Trump Trying to ‘Spike the Football’ on Unemployment When We Are in a Crisis
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Friday on MSNBC’s “Andrea Mitchell Reports,” Democratic National Committee chairman Tom Perez accused President Donald Trump of attempting to “spike the football” because the U.S. added 2.5 million jobs in May, and unemployment dropped to 13.3%.
Mitchell asked, “Let’s talk about the jobs report, better than expected, the president is touting it, and he seems to be trying to reboot his campaign as he was in the Rose Garden speaking for 40 minutes nonstop about this jobs report as the greatest ever. What is your approach to the jobs report today? Are we back on a better trajectory?”
Perez said, “The greatest ever, talk about an inaccurate statement. You know, over the last three months, Andrea, we have seen 19.6 million jobs lost over the last three months. To give you a perspective, Andrea, in the worst three-month of the Obama administration, the worst three-month period, we had 3.2 million jobs loss. Every president since FDR has seen net job growth in their presidency until now with Donald Trump.”
Mitchell pressed, “Excuse me, in fairness, there was a pandemic, let me just say in fairness, there was a pandemic, which caused a complete shutdown of the economy. The most jobs ever, but the fact is it’s coming back from a flatline.”
Perez said, “But the reality, Andrea, is it didn’t have to be this way. What we know is that last December, last January, last February, this president was asleep at the switch. When he should have been asking, when he should have been listening to his experts, he instead was negotiating a trade deal with China. He wants to get that trade deal. It was a crappy trade deal he got. So here we are now. It has exacerbated the extent of the job loss.”
He added, “We are in a crisis, a real crisis. This is like— this jobs report, I want people to get their jobs back. This is like saying, we were 42 points behind in the football game. Now we’re 35 points behind, and he wants to spike the football for being 35 points behind. We’re in a crisis, Andrea.”
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Unemployment Falls to 13.3% and Economy Adds 2.5 Million Jobs
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The unemployment rate fell to 13.3 percent and payrolls unexpectedly rose by 2.5 million workers as the easing of restrictions on business activity and government aid led to new hiring in May.
The U.S. unemployment rate fell below last month’s record-high 14.7 percent, which was the highest on record in data going back to 1948. Economists estimate that the unemployment rate reached 25 percent during the Great Depression, although that predated the scientific economy-wide record keeping the government now deploys.
The job gains mark a sudden turnaround from a month earlier, when the economy shed a staggering 20.5 million jobs, by far the worst monthly decline on records back to 1939.
Economists had expected the unemployment rate to rise to nearly 20 percent and the economy to shed an additional 8 million jobs.
The mandatory closures of many businesses and stay-at-home orders slammed what had been a very healthy labor market hard. The economy added jobs for 113 straight weeks through February, a record streak of growth. The unemployment rate was 3.5 percent in February. And yet job creation was running very hot, with the economy adding an average of 211,000 new jobs each month.
The government has undertaken unprecedented efforts to support employment and provide aid to those who have lost their jobs. Around 150 million taxpayers received stimulus payments of up to $1200 for adults in their household plus additional amounts for children. The Treasury’s Paycheck Protection Program is backing $669 billion of loans to small businesses that can be forgiven if borrowers do not lay off workers. The federal government has been providing an additional $600 on top of state unemployment benefits, paying some Americans more than they earned on the job.
Recent data suggest the labor market has been stabilizing and is now improving. The number of people applying for unemployment benefits has declined every week since hitting a record high 6.8 million in March. Last week, this number fell to around 1.8 million. Over 40 million new claims have been made for unemployment since the wave but ongoing claims are just over 20 million, indicating many Americans have been rehired after losing jobs.
In May, employment in leisure and hospitality jumped by 1.2 million after falling by 7.5 million in April and 743,000 in March. Bars and restaurants hired an additional 1.4 million workers following a combined 6.1 million in job losses in April and March.
Construction employment jumped by 464,000 in May, gaining back almost half of April’s decline.
Dentist offices added 245,000 jobs. Health care employment overall rose by 312,00.
Retail shops added 368,000 jobs in May, after a loss of 2.3 million inApril. Over-the-month job gains occurred in clothing and clothing accessories stores were 95,000. Auto dealers added 85,000. General merchandise stores added 84,000.
Manufacturers added 225,000 jobs, about evenly split between the durable and nondurable goods components. Twenty-eight thousand of those were in auto making plants.
No, the Unemployment Rate Didn’t Really Drop in May
No, the Unemployment Rate Didn’t Really Drop in May
Donald Trump bragged about a bogus jobs number and defiled George Floyd’s name in the process.
The White House/Flickr
The Bureau of Labor Statistics (BLS) surprised the markets and most economists Friday with an announcement that the unemployment rate fell from 14.7 percent in April to 13.3 percent in May. President Donald Trump had the temerity to boast that George Floyd, the unarmed black man killed by a white police officer in Minneapolis, was “looking down from heaven” to admire those numbers. “This is a great day for him,” Trump said in the Rose Garden. “This is a great day for everybody.”
Beyond the president’s remarkable and offensive invocation of Floyd, there is good reason to be skeptical of his administration’s latest report.
BLS asserts that 20,935,000 Americans were unemployed in May, attributing the decline to employers adding 2,509,000 jobs in May as states allowed “a limited resumption of economic activity.” But it’s not that simple. The unexpected decline in the jobless rate is based on a survey of businesses and households conducted over the week of May 16th, and BLS has also reported that 29,965,415 Americans received unemployment insurance benefits in the same week. That’s a gap of 8,980,415 people, enough to raise the May jobless rate 5.7 percentage points to 19.0 percent and much closer to economists’ expectations.
How did the Labor Department come up with such a low figure? Part of it is the Payroll Protection Program: The BLS counted anyone who employers say were still being paid as employed “even if they were not actually at their jobs.” Part of it involves how the BLS treats the many millions of people now on furlough and not being paid. They are considered “unemployed on temporary layoff.” But if BLS expects them to return to their old jobs, based on the survey, they do not count among the unemployed.
Those judgments are left to the BLS’s discretion, and the agency does not issue any data on those decisions. Yet a recent analysis from the Becker Friedman Institute at the University of Chicago estimated that 42 percent of people furloughed by the COVID-19 crisis will never get their old jobs back, and only 30 percent of those laid off will land new jobs later this year. With 30 million people receiving unemployment benefits, that analysis is more consistent with unemployment at 19.0 percent today than 13.3 percent. BLS itself acknowledges in its May report that counting those on furlough as unemployed would raise its official rate to 16.3 percent.
Finally, part of the 9 million-person discrepancy may involve how BLS decides whether a person who is not working is still part of the labor force. If you are out of work but didn’t look for a job over the previous four weeks, or couldn’t work for family reasons such as caring for children who are no longer in school, BLS says you are out of the labor force. If you’re not in the labor force, you’re not unemployed.
Again, it is BLS’s judgment call—and BLS clearly has decided that millions of people who lost their jobs because of COVID-19 shutdowns do not count as unemployed. In May 2019, BLS reported that 96,207,000 working-age Americans were not in the labor force; today, BLS reported that a year later, that number had jumped by 5,865,000 to 102,072,000. For reference, the BLS found that 95,636,000 working-age Americans were not in the labor force in 2019, down 80,000 from 2018. Those 5,865,000 people could explain nearly two-thirds of the 9 million-person gap between those receiving unemployment benefits and those counted as unemployed.
Sometimes, unexpected events produce wildly inaccurate results from computer models that assume the unexpected won’t happen. Perhaps there is a glitch in the BLS unemployment model that couldn’t accommodate disruptions from the COVID black swan. We also have seen the Trump administration interfere with scientific analysis in other areas, such as when it directed what models the U.S. Geological Survey could use for the mandated National Climate Assessment. It would be unprecedented for the White House to pressure the Labor Department to produce a jobless report that serves Donald Trump’s needs and desires. But unlike the May unemployment report, it would not surprise anyone.
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