Post-Crisis Economy Realities

By Arnobio Morelix

What the Lower Unemployment Rate Really Means for the Economy

In the midst of one of the most chaotic times in recent history, Friday brought some good news: The unemployment rate dropped to 16.3 percent in May, compared with 19.7 percent the month before. The Bureau of Labor Statistics had initially released lower figures, suggesting a more improved unemployment picture, but revised them after economists pointed to big errors with the data.

This improvement, however small, matches what we see in the Small Business Job Growth component of the Inc. Entrepreneurship Index, with job creation showing a slight uptick in May when compared with April. We also have hourly wages going up, although the number of hours worked per week is still not growing–they’re just not shrinking at the same pace. The rise in pay can be explained in part because the jobs available are higher risk if they require physical interaction.

As companies and people adapt to the new reality with a mix of reopening and transforming from analog to digital, the blow to jobs is softer — although it is still very significant.

Originally published on June 9, 2020