[OutsiderFan]

From the department of deeply confusing explanations, this might account for why today's numbers don't seem to match the on the ground reality:

The official unemployment rate rose from 3.5 percent in February to 13.3 percent in May (down from its value in April). Even this very large official increase understates the increase in the unemployment rate from a historically-comparable perspective because it counts an extra 4.9 million people who were “not at work for other reasons” as employed and also because 6.3 million people left the labor force since February, more than would be expected even conditional on this large increase in unemployment. Adjusting for these factors our “realistic unemployment rate” was 17.1 percent in May, down from the April value but still higher than any other unemployment rate in over 70 years.

In total, an additional 14.5 million of the unemployed reported being on temporary layoff. If all of these people were immediately recalled back to work and the labor force adjusted accordingly—a very optimistic scenario—the “full recall unemployment rate” would still be a very elevated 7.1 percent. These data suggest the temporary labor market problems are very deep and that even if individuals on temporary layoff returned to work very quickly the United States would still have a recessionary level of unemployment for some time to come.

The irony, of course, is this comes from the same guy that was being pilloried for saying that Trump will be able to report extremely positive employment and economic numbers because we're likely to have a swift economic recovery: Jason Furman.

My head just exploded, because yes, that is irony.

I am not a conspiracy theorist and try hard to rely only on truth, but sometimes it's impossible to know, and all you can do is use past experience to make an assessment of what the truth is. My instinct is that if the Executive Branch has any ability whatsoever to influence numbers, nothing the government says can be trusted to be true at this point in American history. This is a White House that on the current POTUS's first day in office lied and gaslighted the country about the size of a crowd everyone could see with their own eyes. Does anyone think the White House is somehow above manipulating economic data for its own perceived political gain? 

Ergo, I'm not going to say today's employment numbers are false, but I have no reason to believe they are true either.

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After an exodus in April, the labor force in May increased by 1.75 million, pushing the participation rate to 60.8% from 60.2% in April. The total employment level as measured by the survey of households rose by 3.84 million while those who reported being unemployed plunged by 2.1 million, though it was still elevated at 21 million.

From the CNBC link.  The increase in the labor force doesn't totally undercut Furman's argument (since there was a massive decline in the labor force in April), but it does mean that the change in unemployment rate from April to May did not occur because people gave up and left the labor force entirely.

We're not going to go back to the "before times" where the unemployment rate was under 5%.  We may also see a lot of noise (and revisions) to the data, including possibly a month or two where things look to get worse.  But I am much more hopeful than a few weeks ago that we will not get to 20% unemployment, and that the employment level when things settle down will be higher than I was afraid it might be.  The GDP hit for the second quarter (April - June) may also be less dramatic than we were afraid of.

BC

Why was the Fed Chief on 60 Minutes clamoring for Congress to do more a couple weeks ago. I believe that was in support of a 4th bill. I doubt he would have blown his wad advocating for something that if not done, everything would be fine.

[OutsiderFan]

From the department of deeply confusing explanations, this might account for why today's numbers don't seem to match the on the ground reality:

The official unemployment rate rose from 3.5 percent in February to 13.3 percent in May (down from its value in April). Even this very large official increase understates the increase in the unemployment rate from a historically-comparable perspective because it counts an extra 4.9 million people who were “not at work for other reasons” as employed and also because 6.3 million people left the labor force since February, more than would be expected even conditional on this large increase in unemployment. Adjusting for these factors our “realistic unemployment rate” was 17.1 percent in May, down from the April value but still higher than any other unemployment rate in over 70 years.

In total, an additional 14.5 million of the unemployed reported being on temporary layoff. If all of these people were immediately recalled back to work and the labor force adjusted accordingly—a very optimistic scenario—the “full recall unemployment rate” would still be a very elevated 7.1 percent. These data suggest the temporary labor market problems are very deep and that even if individuals on temporary layoff returned to work very quickly the United States would still have a recessionary level of unemployment for some time to come.

The irony, of course, is this comes from the same guy that was being pilloried for saying that Trump will be able to report extremely positive employment and economic numbers because we're likely to have a swift economic recovery: Jason Furman.

My head just exploded, because yes, that is irony.

I am not a conspiracy theorist and try hard to rely only on truth, but sometimes it's impossible to know, and all you can do is use past experience to make an assessment of what the truth is. My instinct is that if the Executive Branch has any ability whatsoever to influence numbers, nothing the government says can be trusted to be true at this point in American history. This is a White House that on the current POTUS's first day in office lied and gaslighted the country about the size of a crowd everyone could see with their own eyes. Does anyone think the White House is somehow above manipulating economic data for its own perceived political gain? 

Ergo, I'm not going to say today's employment numbers are false, but I have no reason to believe they are true either.

---

After an exodus in April, the labor force in May increased by 1.75 million, pushing the participation rate to 60.8% from 60.2% in April. The total employment level as measured by the survey of households rose by 3.84 million while those who reported being unemployed plunged by 2.1 million, though it was still elevated at 21 million.

From the CNBC link.  The increase in the labor force doesn't totally undercut Furman's argument (since there was a massive decline in the labor force in April), but it does mean that the change in unemployment rate from April to May did not occur because people gave up and left the labor force entirely.

We're not going to go back to the "before times" where the unemployment rate was under 5%.  We may also see a lot of noise (and revisions) to the data, including possibly a month or two where things look to get worse.  But I am much more hopeful than a few weeks ago that we will not get to 20% unemployment, and that the employment level when things settle down will be higher than I was afraid it might be.  The GDP hit for the second quarter (April - June) may also be less dramatic than we were afraid of.

BC

Why was the Fed Chief on 60 Minutes clamoring for Congress to do more a couple weeks ago. I believe that was in support of a 4th bill. I doubt he would have blown his wad advocating for something that if not done, everything would be fine.