The real unemployment rate – May 2020
Bottom Line: It’s been two months since I provided a breakdown of the real economy and what it means to you. The coronavirus lockdowns and the absence of reality baked into the previous month’s reporting made April’s report ineffectual the moment it posted. While unemployment most recently has still been on the rise, it’s safe to say that unless a second wave shuts this country down again, we’ve turned the corner on the worst of the job losses due to the virus. By digging beneath the headlines I’m able to find additional understanding and context that may prove helpful as you and your family prepare for what’s next. First, the headline numbers.
- Unemployment rate 14.7% (highest since the Great Depression)
- -20.5 million jobs(over 19 million lost jobs worse than any month on record previously)
- Negative revisions from previous months totaling 214,000 jobs
Industries most negatively impacted
- #1 Leisure and Hospitality
- #2 Education and Healthcare
- #3 Professional and business services
Those three industries accounted for 60% of all jobs lost during April. The challenge, as we begin to look forward, is that there’s no clear fast path back for most of these impacted industries and jobs. How long will it take to recover tourism, entertainment and travel related jobs at this point? There’s really no visibility. That’s also a huge challenge for South Florida going forward. The only silver lining may be that perhaps hospitality companies which often would bring employees to the states on work visas, may opt for Americans seeking these jobs and opportunities as they arise.
Now for the real unemployment rate once underemployed, long-term unemployed and marginally attached people are accounted for:
- Actual: 22.8% up from 6.9% year over year
Key takeaways:
- Here’s a reality check of just how crazy this turn of events has been. Here’s my first takeaway from two months ago...Wow. Just wow. Record gains, lowest unemployment rate in over 50 years and the breadth of the gains was exceptional. Again, minus corona concerns we’d be talking about the stunning strength of the US economy.
- The real unemployment rate isn’t far from the depths of the Great Depression when unemployment hit 24.9%
- Those unaccounted for in the base unemployment rate include 14.14 million Americans who are among the long-term unemployed, underemployed & marginally attached to the workforce.