On Thursday, the U.S. Bureau of Labor Statistics will release figures for unemployment in the month of June. Cornell experts are available for interviews about the report and the challenges facing the U.S. job market.
Erica Groshen is a senior labor economics advisor at the Cornell University School of Industrial and Labor Relations. She is a former commissioner of the U.S. Bureau of Labor Statistics and vice president of the Federal Reserve Bank of New York, and has written extensively on how economies can recover from recessions.
“The June 2020 jobs report promises to reflect the confluence of a bewildering set of influences, including a full range from cautious to full reopening across states, continued impact of the Paycheck Protection Program plus other provisions of the CARES Act relief package, expansion of the COVID-19 recession and persistent consumer caution for health and economic reasons.
“The first two influences should support job growth and reduce the number of workers on temporary layoff. The latter two will slow that growth and cause additional job losses, which may be in the form of permanent layoffs. Industry patterns and the diffusion index from the payroll survey will be particularly of interest to sort out some of these effects. The size and industry of revisions to the April and May payroll reports may also be illuminating as they reflect late reports from firms that may be in very active transitions.
“Another influence on June’s official unemployment rate and number of workers on temporary layoff (furlough) will be how well the Bureau of Labor Statistics and Census Bureau (BLS) succeeded in reducing the misclassification issue that has bedeviled household survey data collection since March. When making month-to-month comparisons, observers will need to follow the BLS’s lead and to scrutinize the supporting statement to ensure that they compare apples to apples.”
Murillo Campello, professor of finance at the SC Johnson College of Business at Cornell University, is the author of the white paper “Corporate Hiring Under COVID-19: Labor Market Concentration, Downskilling, and Income Inequality," published in May by the Bureau of Economic Research.
“Jobless claims are falling but are doing so very slowly. More important, they are falling down from an unprecedented spike in March. The fact that 1.5 million Americans filed for jobless claims last week alone cannot be read as ‘good news.’ Other OECD countries have done a far better job at preserving employment than the U.S., with larger, more generous incentive programs grated to large and small companies.
“The IMF predicts that the world economy will contract about 5% in 2020, with the contraction in the U.S. GDP reaching 8%. This, while Europe’s and Mexico’s GDP each fall more than 10%. China has virtually no growth projected for 2020. In the midst of this, there is little reason for optimism in the U.S. job market. There is no economic growth in the country, nor in the economic areas the U.S. trades with. There is close to no new demand for goods and services in the world economy.
“A number of large-firm bankruptcies are in the works, beyond your local mom-and-pop local businesses. These events create disruptions in several industries’ supply chains. Companies are not in hiring mode any time soon.
“Social distancing is here to stay. Some of the jobs lost will never come back, and others can be performed more efficiently by part-time work shifts from home. The pandemic set in motion a complete restructuring of the workspace. More jobs are lost than we may realize right now.”