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Home > Coronavirus > Preview: May U.S. employment report

Preview: May U.S. employment report

Jun. 3, 2020 by Joseph Brusuelas

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We expect the U.S. economy to shed 7.8 million jobs and the unemployment rate to reach 21.5% when the May U.S. employment estimate is released on Friday.

To put this in the proper context, the near real-time data implies that greater than 40 million people have lost employment and income in less than three months, with 16.6 million people filing for first-time jobless benefits during the May sampling period of the Bureau of Labor Statistics.

For this reason, Friday’s jobs report will not only be dated, but will also most likely not adequately capture the true nature of the collapse in American domestic employment since the onset of the coronavirus pandemic.

We will continue to place an emphasis on weekly initial and continuing jobless claims, as well as the monthly job openings, layoffs and labor turnover data to study labor market flows.

middle market

Like the April U.S. monthly employment report, we would strongly urge clients to all but ignore the average hourly earnings data, which will likely increase by 1% on the month and 8.5% on a year-ago basis.

This will be due to compositional effects linked to the loss of jobs at the lower end of the income spectrum and is not indicative of any near-term breakout in employment among upper-income earners or across the economy.

Rather, we would urge policymakers and forward-looking firm managers to closely scrutinize hours worked and aggregate hours.

Total hours worked increased 0.3% in April, while manufacturing hours worked declined by 5.2% to 38.3 hours. Aggregate hours worked declined by 14.9% to 93.9. The latter two foreshadowed the drop of 13.6% in April personal spending. Further declines in hours worked would imply weaker momentum in the household sector heading into the summer.

For more information on how the coronavirus is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.

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Filed Under: Coronavirus, Economics Tagged With: coronavirus, Covid-19, Joseph Brusuelas, unemployment

About Joseph Brusuelas

@JoeBrusuelas

Joe Brusuelas, “chief economist to the middle market,” is the preeminent voice championing issues and policies facing midsize companies in the United States and around the world. An award-winning economist, Brusuelas has more than 20 years’ experience analyzing U.S. monetary policy, labor markets, fiscal policy, international finance, economic indicators and the condition of the U.S. consumer.

A member of the Wall Street Journal’s forecasting panel, Brusuelas regularly briefs members of Congress and other senior officials regarding the impacts of federal policy on the middle market and the factors by which middle market executives make business decisions. He also frequently offers his insights on the U.S., Canadian and global economies in the financial media. In 2020, he was named one of the 100 most influential economists by Richtopia.

Before joining RSM in 2014, Brusuelas spent four years as a senior economist at Bloomberg L.P. and the Bloomberg Briefs newsletter group, where he co-founded the award-winning Bloomberg Economic Brief. Earlier in his career, he was a director at Moody's Analytics covering the U.S. and global economies for the Dismal Scientist website. He also served as chief economist at Merk Investments L.L.C. and chief U.S. economist at IDEAglobal.

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