January 19, 2021

A Unemployment Report Without Silver Linings

Even as the economy recovered, people had experienced various forms of damage. Some people’s skills became outdated. But more generally, many people just lost a sense of attachment to the work force. It’s much harder to find a job when you’ve been out of work for years than when you’ve been on a short-term layoff.

And that’s before you get to the more social dimensions of the problem; those out of the work force can become vulnerable to developing addictions and other mental health problems. The nonemployment crisis of the 2010s and the opioid crisis of the 2010s weren’t completely separate.

In that episode, the share of prime-age Americans who were employed did not return to its January 2008 level until August 2019! When economists talk about what a slow, disappointing expansion that was, this is a big part of what they are referring to.

There is a good chance to avoid that fate in the recovery from the pandemic recession. A quick snapback in employment after widespread vaccination is possible in 2021, and it could pull many of those long-term unemployed and nonemployed back into the work force quickly, after only a year or so of detachment from the rhythms of work life.

This is normally the point in analyzing a bad jobs report where one points out silver linings — those little reasons for optimism that are hiding if you know where to look.

This month, they are hard to find.

The data in the new numbers are based on employment levels in the week of Nov. 8-14. Various real-time data sources point to a softening in economic activity since then, as coronavirus infections have risen and weather has turned colder, limiting outdoor dining and retail options. December employment numbers could well be worse.

For a slight hint of optimism, one of the big categories of job loss that dragged down the November numbers will probably reverse. Retailers cut about 35,000 jobs, according to the official numbers, which are adjusted for the typical seasonal patterns. But if you ignore those seasonal adjustments, the sector added 302,000 jobs — stores did do holiday hiring, just less than past experience would have predicted.

Article source: https://www.nytimes.com/2020/12/04/upshot/jobs-report-unemployment.html

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