May job losses could mean only half of American adults are working
The May jobs report, expected Friday, will add to the 20.5 million Americans who lost jobs in April
On Friday, the government will release the May unemployment report, which is expected to show eight million American jobs lost during the third month of the global coronavirus pandemic.
The prediction follows the release Wednesday of the ADP private payroll report documenting only 2.75 million jobs lost in May, a number that fell far below the initial estimate. However, the official unemployment rate may very well still edge 20%, and the report may indicate that fewer than 50% of all adults are working.
Though nearly all layoffs in the past months have been due to the pandemic-induced shutdown, there remains uncertainty about how long those who lost jobs will be out of work. That uncertainty has now been compounded by riots that have overtaken several American cities in the wake of the death of George Floyd while in police custody on May 25. Though, analysts presently expect the economic impact of the riots to be limited, in large part because several of the cities they have impacted most directly were still largely closed down, like New York and Washington, D.C.
Consulting firm Oxford Economics, projects that the economy could regain as many as 17 million jobs by January 2021. But that would account for only about half of those that have been lost to date. Since March, 40 million Americans have applied for unemployment benefits, and Friday's report could situate the current jobless number at 30 million.
Some people who lost their jobs during March and April have already been rehired. Goldman Sachs estimate that as many as 3 million people who were laid off at the beginning of the pandemic have been rehired.
Nearly 75% of U.S. states are allowing restaurants to resume dine-in service, and many have reopened movie theaters, nail and hair salons, and gyms — though restrictions on total capacity are largely being implemented. These developments have made it so that 10% of small companies reported adding jobs and hours in May, a huge uptick from where those figures stood in April.
Thursday's weekly jobless report from the Department of Labor showed 1.9 million Americans had filed for unemployment benefits during the last week of May, marking the first time since March that fewer than 2 million people per week had filed for unemployment insurance.
However, significant levels of economic recovery likely won’t take place until members of the public are willing to return in droves to former activities with minimal fear of spreading or contracting the virus. Economists at Moodys Analytics predict that this likely won’t be the case until a vaccine is developed and available, or testing is extended.
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