The economy rebounded from a dismal April when only 278,000 jobs were created, and the unemployment rate ticked up to 6.2 percent. In May, 559,000 jobs were created and unemployment fell by three-tenths of a percent to 5.8 percent. Over half of these new jobs were in leisure and hospitality as the restrictions imposed by the pandemic were eased still further and the vaccination rate continued to climb while the number of new COVID cases declined.
But those numbers, although much better than April’s, are still below expectations. Economists had predicted 671,000 new jobs in May.
Many state governors, mostly Republicans, have declined to accept the $300-per-person unemployment benefit offered by the federal government because it is thought by many to dissuade low-income workers from looking for work. Certainly, there are “We’re Hiring” signs all over the place, and there are still 8.1 million unfilled job openings, which is a record.
The Wall Street Journal pointed out recently that, of the ten states that have the lowest unemployment rates, all have Republican governors. Meanwhile, nine of the ten states with the highest rates of unemployment have Democratic governors (the exception is Wisconsin, where the state supreme court invalidated the governor’s covid restrictions a year ago). That is not a coincidence.
When the federal unemployment benefit runs out in September, there is likely to be a surge in job creation. But many economists think it will be another year before the economy is fully back to normal and the pandemic only a bad memory. The country is still down 7.6 million jobs compared with February 2020, and 9.6 million are unemployed. The labor force participation rate is now 61.6 percent. In February 2020, it was 63.3 percent. The unemployment rate then was 3.5 percent, about as low as that number can go at the national level.
We still have a long way to go.