Are the worst of U.S. job losses behind us? - The San Diego Union-Tribune

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The U.S. jobless rate fell to 13.3 percent in May and employers added 2.5 million jobs. Unemployment was 14.7 percent in April.

While the stock market surged Friday following the news, analysts were split on the report’s significance. Some said the bounceback is happening quicker than expected, but others seemed more cautious about the unemployment situation getting better because of continued COVID-19 cases and riots closing businesses.

Q: Are the worst of U.S. job losses behind us?

Gary London, London Moeder Advisors

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NO: While it is great to see the uptick, trends are not made with one month’s data. Even at this rate, we would not see a return to pre-recession rates for about a year. It is going to be a long, tough slog back, particularly for San Diego’s tourism and main street businesses. The comeback really doesn’t start until a vaccine is widely distributed. My advice is to plan strategically and creatively how to run your lives and businesses in a slow economy for at least the next year.

Phil Blair, Manpower

YES: I think the late May layoffs will be more than balanced by the states continuing to open up their nonessential businesses and calling back those workers. The hardest-hit area of tourism/hospitality will be the slowest to recover but with restaurants, retail and entertainment reopening we will see a surge of back to work numbers that compensate for May layoffs. But will San Diego ever see 2.7 percent unemployment again? I doubt it.

Alan Gin, University of San Diego

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YES: The economy is not likely to lose many more jobs as most of the damage was done in the initial closing of the economy. As more businesses reopen, employment will increase as people return to work. But the labor market will be sluggish for a long time, with the unemployment rate in double digits for the rest of the year and into 2021. Some businesses have closed for good and others are operating at reduced levels, which limits the opportunities for those looking for jobs.

Reginald Jones, Jacobs Center for Neighborhood Innovation

Is not participating this week.

Lynn Reaser, Point Loma Nazarene University

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YES: As the U.S. economy shut down to allow only essential services, a record 22 million jobs were lost in March and April. Even with a second round of shutdowns, additional cuts of that magnitude would prevent the delivery of critical goods. While the worst of jobs losses are over, it could take about 1 1/2 years to return to our prior employment peak. They will also not all be the same jobs, but ones in different firms, industries, and occupations.

Austin Neudecker, Weave Growth

YES: I hope we have seen the worst of the current pandemic. We now depend on each other to take the appropriate precautions to facilitate our economic recovery. Not just our livelihoods, but indeed some of our lives, rely on the responsible use of protective gear and quasi-obsessive hygiene. While I am prepared for some resurgence, I remain optimistic that the economy (not the just public markets, but jobs, lending, insurance, etc.) all will bumble upward.

Bob Rauch, R.A. Rauch & Associates

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YES: The economy has clearly hit bottom from the fastest drop to the pits in our nation’s history due to our shutdown. The PPP loans have helped but we will end up having double-digit unemployment for at least another year or two. We need reduced taxes, incentives for business growth, deregulation and “tariff free” trade. No more congressional spending and lots of retraining displaced workers should be a high priority.

Norm Miller, University of San Diego

YES: We will see more waves of unemployment after PPP and stimulus effects wind down. Many higher-paid white-collar jobs, state and local government jobs, and university jobs have yet to be cut, but trimming will be essential as budget realities set in. Retail jobs (1.6 million) came surging back faster than expected. Absent another quarantine, the worst of it in absolute numbers may be behind us, but under-employment and some highly paid job losses are on the horizon.

James Hamilton, UC San Diego

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YES: But that’s primarily because the magnitude of the job losses we’ve already seen was so massive and unprecedented. There may be upward adjustments in the estimated unemployment rate based on people that the BLS missed in May, and the second-quarter GDP numbers will be horrific. But things will improve after that. The big question is how long it takes to recover what we’ve lost. It will probably take years, not months.

David Ely, San Diego State University

YES: After huge drops in employment and increases in the unemployment rate in March and April, the broad labor market seems to have improved modestly in May. Also, the number of people receiving unemployment benefits has declined from its peak in early May. But while the worst may be in the past, America’s employment situation is still awful. At 13.3 percent, the unemployment rate is still above the peak experienced during the last recession.

Ray Major, SANDAG

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YES: The first bit of good news in nearly three months regarding employment signals that the worst is over. Millions of Americans are ready to return to work and will do so as the economy reopens. Social distancing rules will temper the recovery. On the downside, large and small businesses will fail and many jobs will be permanently gone. A resurgence of COVID-19 in the fall could result in another lockdown resulting in more job losses.

Chris Van Gorder, Scripps Health

YES: I think we might be past the worst part of the pandemic from an economic perspective if the public and businesses strictly follow hygiene, distancing, masking and tracing procedures. But it may be years before the jobless rate approaches the historic lows of last year. If businesses and the public start acting like the pandemic is over, we will likely surge again, forcing stricter regulations and another negative impact to the economy.

Kelly Cunningham, San Diego Institute for Economic Research

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YES: The worst has passed but that does not mean problems will not persist. The sharp decrease of jobs, unprecedented in history, was due to government decree not economic conditions. Most job losses were temporary layoffs and should quickly rebound. However, the disruption to business activity had devastating, lasting impacts and many jobs will not easily return. Recovery will take considerable time for many businesses and jobs especially among discretionary focused consumption of leisure and entertainment.

Jamie Moraga, IntelliSolutions

YES: Unless we encounter something unforeseen or experience a second surge of COVID-19, we should continue to see a job recovery. Recent employment numbers from the Labor Department are promising; employment rose by 2.5 million in May and the jobless rate declined to 13.3 percent. As more industries slowly reopen hopefully more jobs will continue to be restored or created and the June jobs report will bring us even more positive economic news.

Have an idea for an EconoMeter question? Email me at phillip.molnar@sduniontribune.com.

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Are the worst of U.S. job losses behind us? - The San Diego Union-Tribune
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