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What To Watch For in the Employment Report

Summary:
Equitable Growth alumnus Nick Bunker is closely watching the labor market in advance of this week’s employment report. The employment report will be one of our first significant clues as to the extent to which the coronavirus supply shock is turning into a demand shock as well: Nick Bunker: May 2020 Jobs Day Preview: Tracking the Spread of the Coronavirus Shock https://www.hiringlab.org/2020/06/02/may-2020-jobs-day-preview/: ‘The coronavirus has devastated the US economy, leading to the destruction of over 21 million payroll jobs since February.... The concentration of job losses so far is unsurprising, with the leisure and hospitality sector seeing total employment drop by almost 50%. Employment in the utilities sector has barely fallen, losing less than 1% of jobs. If the

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Equitable Growth alumnus Nick Bunker is closely watching the labor market in advance of this week’s employment report. The employment report will be one of our first significant clues as to the extent to which the coronavirus supply shock is turning into a demand shock as well:

Nick Bunker: May 2020 Jobs Day Preview: Tracking the Spread of the Coronavirus Shock https://www.hiringlab.org/2020/06/02/may-2020-jobs-day-preview/: ‘The coronavirus has devastated the US economy, leading to the destruction of over 21 million payroll jobs since February.... The concentration of job losses so far is unsurprising, with the leisure and hospitality sector seeing total employment drop by almost 50%. Employment in the utilities sector has barely fallen, losing less than 1% of jobs.

If the cumulative employment drop starts to pile up in utilities or other indirectly affected sectors, that could mean that more of the aggregate job loss is due to a systematic, economy-wide shock rather than a sector-specific one. Cumulative job loss will also put the eventual jobs recovery in a fuller context....

Hopes for a V-shaped recovery were already fleeting, but if more and more employers are shedding jobs, they might be gone for good. Elsewhere in the report, I’ll be looking for the answers to these questions:

  • Will unemployment due to reasons other than temporary layoff start to rise, as job loss becomes permanent?

  • Will employers continue to reduce work hours and shift more workers to involuntary part-time work?

  • How much further will the drop in the labor force participation rate hold down the rise in the unemployment rate?…

Bradford DeLong
J. Bradford DeLong is Professor of Economics at the University of California at Berkeley and a research associate at the National Bureau of Economic Research. He was Deputy Assistant US Treasury Secretary during the Clinton Administration, where he was heavily involved in budget and trade negotiations. His role in designing the bailout of Mexico during the 1994 peso crisis placed him at the forefront of Latin America’s transformation into a region of open economies, and cemented his stature as a leading voice in economic-policy debates.

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