So, Kudlow was right, it's a V-shaped recovery, the Trump Depression is over and we're all fine, right?
Employment stunningly rose by 2.5 million in May and the jobless rate declined to 13.3%, according to data Friday from the Labor Department that was far better than economists had been expecting and indicated that an economic turnaround could be close at hand.
Economists surveyed by Dow Jones had been expecting payrolls to drop by 8.33 million and the unemployment rate to rise to 19.5% from April’s 14.7%. If Wall Street expectations had been accurate, it would have been the worst figure since the Great Depression.
As it turned out, May’s numbers showed the U.S. may well be on the road to recovery after its fastest plunge in history.
“It seems the damage from the nationwide lockdown was not as severe or as lasting as we feared a month ago,” said Scott Clemons, chief investment strategist at Brown Brothers Harriman.
Trump dropped a surprise news conference to gloat about the figures and declared the economic depression over before it began.
So is he right? And will this win him reelection in November if the economy adds back the remaining 19.5 million jobs lost this spring?
Well, it does prove that reopening businesses during a pandemic forced enough Americans back to work that job hemorrhaging was stanched. The problem with tourniquets that tight is they can still cause you to lose a limb.
This is telling. Look at the where the jobs were gained v. lost in May— Heather Long (@byHeatherLong) June 5, 2020
Restaurants: +1.4 million
Air transport: -50,000
The gigantic "if" here is "If the recovery can continue like this."
I don't think it will. I think this is the biggest Dead Cat Bounce in job numbers history.
Once again, the Labor Department acknowledged making errors in how it classified people as employed and said the real May rate is worse than the numbers indicate. But the government made the same mistakes in April, and together the figures still show the job market is improving.
Friday's report made it clear the government continues to struggle with how it classifies millions of workers on temporary layoff. The Labor Department admitted that government household survey-takers mistakenly counted about 4.9 million temporarily laid-off people as employed.
The government doesn't correct its survey results for fear of the appearance of political manipulation.
Had the mistake been corrected, the unemployment rate would have risen to 16.1 percent in May. But the corrected April figure would have been more than than 19 percent, rather than 14.7 percent.