Thousands of jobs would have been added each month over the last year without the pandemic recession. If we count how many jobs may have been created if the recession hadn’t hit—consider average job growth (202,000) over the 12 months before the recession—we are now short 11.9 million jobs since February. Make no mistake: The $1.9 trillion relief and recovery bill being considered in Congress this week is exactly what workers and their families need right now.

Low-wage workers continue to be the hardest hit in the recession. While leisure and hospitality—the lowest paid sector—saw significant improvements in February (+355,000 jobs), it remains 3.5 million jobs below where it was in February 2020. In addition, the labor market continued to hemorrhage public-sector jobs last month, falling by 86,000 in February. The state and local government job shortfall stands at 1.4 million jobs, with 1.0 million of those losses in state and local education employment. Given that state and local governments face many new expenses in figuring out how to open schools safely, it is imperative that additional aid be provided to state and local governments so that new costs won’t squeeze out necessary hiring. Policymakers must not shortchange aid to state and local governments, which is essential to a robust recovery.

As we approach International Women’s Day, it is important to remember that women have borne a heavier burden of job losses in the pandemic recession. Women’s disproportionate job losses are due in part to both occupational segregation (i.e., women disproportionately more likely to hold lower-wage service-sector jobs) and caretaking responsibilities (i.e., closed schools and day care options, and caregiving responsibilities for other family members in general). In the United States, there’s a clear gender story here, but in the aggregate, it’s not about white women. Black and Hispanic women experienced the most significant and disproportionate job losses in the pandemic recession.

Black workers experienced an uptick in unemployment in February, back to 9.9%, just shy of the high-water mark in the Great Recession. Because of historic and current systemic racism, Black and Latinx workers have seen more job loss and more illness in this pandemic. Passing large-scale relief measures now is an economic and racial justice imperative.

The unemployment rate improved slightly, hitting 6.2% in February, but it would be a huge oversight to think that those officially unemployed workers are the only ones to experience economic pain in the pandemic recession.

In addition to the 10.0 million officially unemployed workers in February 2021, we must add four more groups of economically hurt workers:

• First, the 756,000 workers misclassified as “employed, not at work.”
• Second, the 2.7 million undercount of unemployed workers, found even in normal times.
• Third, the 5.1 million workers now out of the labor force and not counted among the unemployed—measured by the differential between the size of the current labor force and what the labor force would be if the labor force participation rate hadn’t dropped over the last year.
• Fourth, the 6.6 million workers who experienced a drop in hours and pay because of the pandemic.

(More detailed methodology on each of these numbers can be found here.)

In total, this means that 25.1 million workers—or 14.7% of the workforce—have been directly harmed by the coronavirus downturn. On top of this, another 1.2 million people applied for unemployment insurance benefits last week. It is clear that policymakers need to step up right now to provide relief, and the $1.9 trillion relief and recovery bill is at the scale of the problem and is essential for a robust and equitable recovery.

These swings are partly due to seasonal adjustments. Every December, there are expectations of ramped up holiday hiring followed by cutbacks in January. Usually, the seasonal adjustment tempers those effects so comparisons between months are more reliable. Because hiring didn’t ramp up in December to then experience the losses in January, I recommend taking an average of December and January to get a better sense of current labor market momentum. The average job change of the last two months is -89,000, a troubling sign for an economy that desperately needs more life.

Overall, the labor market is down 9.9 million jobs since February 2020. And, if we count how many jobs may have been created if the recession hadn’t hit—a more appropriate counterfactual for the current hole we are in might be average job growth over the 12 months before the recession (202,000)—we are now short 12.1 million jobs since February. Policymakers need to go big to solve this crisis.

In today’s report, the BLS discussed the fact that seasonal adjustments also distorted the numbers on state and local government jobs. Therefore, little attention should be paid to what appears to be an increase in public-sector employment. State and local government employment is down 1.3 million jobs since February 2020. The vast majority of these job losses (nearly 1 million) are in state and local education employment, which remains 9.0% below its February level. Because of the economic crises, states and localities are facing huge revenue shortfalls, which must be relieved with more federal aid. What we know from the last recession is that states that preserved or grew their public-sector workforce fared better, with fewer job losses overall, fewer private-sector job cuts, less growth in unemployment, and faster job growth. Without significant federal investment, it will be impossible for state and local governments to avoid further cuts and return to their pre-pandemic employment levels in the near future.

Turning to the household survey, the latest data indicate that the unemployment rate fell 0.4 percentage points to 6.3% in January. The decline was primarily among workers experiencing shorter spells of unemployment. The number of long-term unemployed—those unemployed for 27 weeks or more—held steady at 4.0 million.

As bad as these numbers are, they understate the economic pain. These counts of the unemployed do not take into account the millions of workers who have left the labor force or were misclassified as employed but not at work or had their hours cut. Taking all those workers into account, a total of 25.5 million workers—15.0% of the workforce—were directly hurt by the COVID downturn in January. This proves essential the need for extensions to unemployment insurance to provide a necessary lifeline to those workers and their families.

The overall unemployment rate also misses the fact that the pandemic recession and recovery, such as it is, is not hitting all workers equally. In January, white, Black, and Hispanic unemployment rates dropped, while the Asian American unemployment rate rose. The largest gap in unemployment still remains between white workers with an unemployment rate of 5.7% and Black workers at 9.2%.

The data also show that it is far from true that “everyone” is working from home because of the pandemic. Only 23.2% of employed people report having teleworked or worked at home in the last four weeks because of the pandemic—less than one in four workers.

Today’s jobs day report reinforces the need for Congress to take bold action in passing crucial relief measures through reconciliation.

• Holiday hiring didn’t pick up enough to make up for other factors dragging down job growth. Employment declined in leisure and hospitality, a fall of 498,000 jobs. That sector remains 3.9 million jobs below where it was before the pandemic recession hit. State and local government employment continued to decline for four months in a row in December and is now experiencing a shortfall of 1.4 million from pre-pandemic conditions. About three-quarters of these losses—over 1 million jobs—are in education.

• The third wave of COVID-19 has meant rising caseloads, hospitalizations, and deaths, and reshuttering of many businesses. The number of workers on temporary layoffs has increased for the first time since April, rising by 277,00 between November and December.

• The overall unemployment rate remained at 6.7% in December, but this is not hitting all workers equally. In December, Black unemployment improved but remains elevated at 9.9%, just below the worst overall unemployment rate of the Great Recession (peak at 10.0%). Hispanic unemployment experienced a significant increase, from 8.4% to 9.3%. White unemployment is now at 6.0%, while Asian unemployment fell to 5.9%.

• Long-term unemployment (27 weeks and over) continues to rise, increasing by 27,000 in December. The share of the unemployed who have been unemployed at least 27 weeks is now at 37.1%. The latest congressional relief bill is an important step toward addressing some of this pain by extending unemployment insurance, but it is not at the scale of the problem. Without additional relief, millions of workers will exhaust the extended benefits in mid-March.

• The data show that it is far from true that “everyone” is working from home because of the pandemic. Only 23.7% of employed people report having teleworked or worked at home in the last four weeks because of the pandemic—less than one in four workers.

President-elect Biden will inherit an economy that has been decimated by Trump, who not only presided over outright job losses during his tenure, but also enacted a litany of anti-worker policy decisions and squandered the labor market strength he inherited. Hopefully, the economy will get more desperately needed support in 2021 from the new Congress. Their top priorities must be aid to state and local governments and further extensions of unemployment insurance.

The unemployment rate edged down to 6.7%, but for the “wrong” reasons as 400,000 people left the labor force. The number of workers unemployed 27 weeks or more—the long-term unemployed—shot up to 3.9 million in November. Now, over one-third (36.9%) of the total unemployed are long-term unemployed.

The recovery continues to wane because of the removal of important relief measures as well as the fact that the “easy” gains from workers on temporary layoffs continue to dwindle (temporary layoffs fell by 441,000 in November). Stark disparities remain in the labor market with the Black unemployment rate (10.3%) still higher than the peak of the overall unemployment rate in the Great Recession (10.0%) while white unemployment is now at 5.9%.

Public-sector employment continued to decline for the third month in a row. State and local employment remains 1.3 million jobs below its pre-pandemic level. Most of these losses are in education employment (which is down 1.0 million jobs since February). In addition to reinstating and extending the vital pandemic UI programs and other protections in the CARES Act (e.g. health measures, paid sick leave, eviction moratorium), relief and recovery efforts need to include aid to state and local governments, which face revenue shortfalls and costly forced austerity without federal assistance.

Jobs day

Even without the 147,000 loss in temporary Census employment in October, the economy added only 785,000 jobs. At this pace, it will take years for the U.S. economy to fully recover. With long-term unemployment on the rise and little hope for additional relief, workers and their families do not have years to keep their heads above water. As the winter approaches and COVID-19 cases continue to rise, millions of people across the country will be left out in the cold. Unlike his predecessor, the incoming Biden administration will inherit a devastated labor market that will need considerable relief and stimulus—quickly.

Key numbers from today’s report:

• Long-term unemployment (27 weeks and over) continues to rise, increasing by 1.2 million in October. With the expiration of enhanced (PUA) and extended (PEUC) unemployment insurance benefits set to expire on December 26, it is clear that more pain is on the horizon for these workers and their families. Policymakers have the power to reduce that pain by provided enhanced benefits and further extensions.
• The unemployment rate for Black workers remains higher than the peak of the overall unemployment rate in the Great Recession. In October, Black unemployment improved but remains elevated at 10.8%. White unemployment is now at 6.0%, while Hispanic and Asian unemployment both declined to 8.8% and 7.6%, respectively.
• The employment-to-population ratio (EPOP) of workers across demographic groups remains depressed. In particularly, the EPOP for Black men and Black women as well as Hispanic women remains over 6 percentage points lower than in February. White men and white women have much less distance to travel to return to pre-pandemic employment levels, down 3.4 and 3.3 percentage points,  respectively.
• State and local employment continues to decline, falling 130,000 in October. The labor market is down 1.3 million state and local government jobs over the last eight months—most of it (more than 1.0 million) in education. Austerity stifled the recovery from the Great Recession. We must not make that mistake again. Senate Republicans could fix this immediately by stopping their blocking of aid to state and local governments.
• The data show that it is far from true that “everyone” is working from home because of the pandemic. Only 21.2% of employed people report having teleworked or worked at home in the last four weeks because of the pandemic—less than one in four workers.
• The decline in unemployment in October came almost entirely from those who had been temporarily laid off. The number of workers who had been permanently laid off (or completed temporary jobs) ticked up, from 4.50 million to 4.51 million. This does not bode well for the pace of the recovery.

Policymakers cannot ignore the economic devastation happening to workers and their families across the country. The hopes of a quick recovery have long since been dashed, but swift action can lessen the continued hardship faced.

Jobs day

The U.S. economy is still down 10.7 million jobs from where it was in February, before the pandemic hit. Using average monthly job growth over the year ending February 2020 as the counterfactual, the jobs deficit is easily over 12 million. That’s 10.7 million fewer jobs we have than in February, plus 1.4 million jobs we would have added if the recession hadn’t occurred. Further, nearly a quarter million jobs in September—247,000—were temporary jobs related to the decennial census that will disappear in the next few months.

Today’s report also shows a significant uptick in long-term unemployment, which is defined as an unemployment duration of 27 weeks or more. As the recession has dragged on over the last several months, we have seen workers with longer and longer spells of unemployment. There are now 7.3 million workers unemployed for at least 15 weeks and 2.4 million who are unemployed for 27 weeks or longer. In September, there was a large increase in those with the longest spells of unemployment, up 781,000 in one month. While many of the long-term unemployed are now protected with 13 additional weeks through Pandemic Emergency Unemployment Compensation (PEUC), that provision is set to expire at the end of 2020. At the current slowing rate of job growth and expected continued drag from austerity as federal policymakers fail to act, weakness in the labor market is expected to drag on for years and those workers will be left out in the cold well before they are able to get back on their feet.

In September, we also see a continuation of trends over the last few months: The recovery has been more successful for white workers than Black, Hispanic, or Asian workers. While all groups saw improvement in September, the unemployment rate for Black and Hispanic workers remain significantly higher than for white workers. The unemployment rate for Black workers is now 12.1%, followed by 10.3% for Hispanic workers and 7.0% for white workers. Asian workers saw the biggest drop in unemployment in September of 1.8 percentage points and are at 8.9%.

Unfortunately, the labor market distress is long from over. The economic pain easily extends to over 30 million people in the economy today. That doesn’t include people who had lost their jobs and regained employment but got behind on their bills—or those who lost loved ones and providers to illness. The pandemic continues to spread, including into the White House, and may worsen in the winter months along with increasing numbers of evictions. Further, recent reports of impending layoffs (for instance, here and here) suggest even more trouble on the horizon.

It is a simple fact that the labor market damage would be significantly lessened by vital public health investments and economic relief for today’s workforce as well as state and local governments. There were large losses in the public sector in September, not only because of the decrease of temporary Census workers, but more acutely because of the losses in local K-12 education. Education employment was already suffering prior to the current economy crises. School systems need more, not fewer, resources in these challenging times.

Policymakers must act if there’s any hope for a swifter and more broad-based recovery.

Overall job growth was bolstered by a temporary gain in government employment for Census workers; without it, the jobs deficit would be 11.8 million. Public sector employment is still 831,000 below its pre-pandemic level in February. Federal policymakers need to step up and provide more fiscal relief to state and local governments so they can continue to provide necessary services and prevent unnecessary cuts to their budgets as their revenue falls in the face of the historically large shutdown in economic activity. In fact, they could do one better and increase public-sector employment through the hiring of additional public health workers and contact tracers. Further, the current challenges to schools require more, not less, education staff in coming months. As in the Great Recession, the pursuit of austerity will stifle a quick and full recovery.

In the private sector, job growth occurred in retail trade, profession and business services, and leisure and hospitality. However, leisure and hospitality still has 4.1 million fewer jobs than in February. Education and health services has 1.5 million fewer jobs in August than in February. Professional and business services are 1.5 million down from February. Retail trade has 655,400 fewer jobs in August than in February. The U.S. economy is still facing a huge jobs deficit. Even in manufacturing, which saw gains of 29,000 in August, there are 720,000 fewer jobs than in the pre-pandemic economy.

Turning the household survey, there was a significantly decline in the overall unemployment rate from 10.2% down to 8.4%. This happened for the “right” reasons—more workers getting jobs rather than an exodus from the labor force. After continuing to falter as white workers recovered faster, Black unemployment finally has started improving. The white unemployment rate hit 7.3% in August, declining 1.9 percentage points. The Black unemployment rate fell 1.6 percentage points to 13.0% in August. The Hispanic unemployment rate fell 2.4 percentage points to 10.5% while the Asian unemployment rate fell 1.3 percentage points to 10.7%. While the improvements are welcome, it is clear that white workers continue to have a swifter recovery.

It’s important to remember that the overall unemployment rate of 8.4% is still higher than the unemployment rate ever got in either the early 1990s or the early 2000s recessions. And, the unemployment rate is not counting all coronavirus-related job losses. In August, there were 13.6 million workers who were officially unemployed. But there were an additional 1.1 million workers who were temporarily unemployed but who were being misclassified as “employed not a work.” There were also 4.3 million workers who were out of work as a result of the virus but who were being counted as having dropped out of the labor force because they weren’t actively seeking work. Altogether, that is 19.0 million workers who were either officially unemployed or otherwise out of work as a result of the virus in August. If all these workers were taken into account, the unemployment rate would have been 11.5% in August. Furthermore, August saw an increase of over half a million in permanent job losses. It is clear that the pain is nowhere near over for millions of workers and their families across the country.

This Labor Day, we will hear a lot of rhetoric from policymakers about helping workers, but it is important that they take real action that will help working people in this recovery.

As with June, the bulk of the job gains occurred in leisure and hospitality (592,000), primarily food services and drinking places (502,000). Even with these gains, this sector remains down 2.6 million jobs since February. Retail trade employment also added jobs (258,000), followed by professional and business services (170,000) and other services (149,000).

Then, there’s the reported significant increase in public sector employment, which should be completely discounted in this report. Public sector employment, however, remains 1.1 million below its level in February. We’ve seen large reductions in state and local public sector employment—a sector which disproportionately employs women and Black workers—over the last few months. Given that a significant share of these are in public education and that they happened at a time of year when they wouldn’t usually occur, it’s likely that the artificial uptick in jobs in those sectors in July occurred when the seasonal adjustment would have smoothed out the end of the school year. So, I’d warn data watchers to consider those gains with a grain of salt, and to look at the overall changes from February (pre-COVID-19) to July.

The unemployment rate also fell in July, from 11.1% in June to 10.2% in July. At this level, the unemployment rate remains higher than the worst month of the Great Recession, when it hit 10.0% in 2009. If workers who were sidelined as a result of the coronavirus—either out of the labor force or misclassified as employed not at work—were included, the unemployment rate would be 13.8%. After continuing to rise in June, the unemployment rate for Black men finally saw some mild improvement, falling from 16.3% in June to 15.2% in July, but remains significantly higher than other race and gender groups. Latina workers, who had faced the highest unemployment rates in this recession at 20.2% in April, are now down to 14.0%. Across the board, the unemployment rates are still quite high and the unemployment insurance data released yesterday suggest the pain is likely to continue for a long time.

Federal policymakers need to act now to reinstate the $600 unemployment insurance benefits to the 30+ million workers who are desperately trying to make ends meet. And, those benefits are supporting a huge amount of spending, which means, without it, the loss of about five million jobs.

Federal policymakers also need to provide massive fiscal relief to state and local governments so they can continue to provide necessary services and prevent unnecessary cuts to their budgets as their revenue falls. In fact, they could do one better and increase public-sector employment through the hiring of additional public health workers and contact tracers. With virtual, and in some cases hybrid, school openings planned, there will need to be more public education staff, not less, in coming months.

In June, jobs were added due to many states continuing to lift their stay at home requirements. Job gains occurred primarily in leisure and hospitality, an increase of 2.1 million, a significant share of the overall rise of 4.8 million. Other sectors that saw significant job gains include retail trade, education and health services, other services, manufacturing, and professional and business services. Public-sector employment saw a mild uptick, though that was due to seasonal adjustments, which anticipate a drop off in employment at the end of the school year and mean month-to-month changes are providing distorted information in this sector right now. Since February, state and local government jobs are down 1.5 million. (This is described in more detail below.)

The unemployment rate fell as well, from 13.3% in May to 11.1% in June. At 11.1%, the unemployment rate remains higher than in the worst month of the Great Recession, when it hit 10.0% in 2009. As with May, the employment gains were uneven. The white unemployment rate continued to fall, from a high of 14.2% in April to 12.4% in May and now 10.1% in June. At the same time, the Black unemployment rate went from 16.7% in April to 16.8% in May and saw mild improvement in June, hitting 15.4%.. Among Black men, however, the unemployment rate actually rose between May and June, hitting this recession’s high water mark of 16.3% in June. The Latinx unemployment rate saw some improvements the last couple of months. At 15.3%, Latina workers saw significant improvement—likely with the sharp rise in leisure and hospitality in June—and now have a slightly lower unemployment rate than Black male workers (16.3%).

Even with these mild improvements, a large jobs deficit remains. Payroll employment remains 14.7 million lower than it was in February, and the unemployment rate is 7.6 percentage points higher than it was in February. And, the unemployment rate is undercounting the extent of economic pain. In June, there were 17.8 million workers who were officially unemployed, but there were an additional 2.0 million workers who were temporarily unemployed but who were being misclassified as “employed not at work,” (see questions 11-14 here for more explanation). And 5.0 million who were out of work as a result of the virus were being counted as having dropped out of the labor force. Altogether, that is 24.5 million workers who are either officially unemployed or otherwise out of work as a result of the virus. If all these workers were taken into account, the unemployment rate would be a whopping 15.0%. Further, only about a third of these workers can reasonably expect to be called back to a prior job; the unemployment rate that includes only those who don’t have a reasonable chance of being called back to a prior job was 9.3%. (The methodology for the numbers in this paragraph can be found here).

How do June’s jobs numbers square with June’s unemployment insurance (UI) claims? As mentioned above, the June jobs data show that as of mid-June, there were 24.5 million workers who were either officially unemployed or otherwise out of work as a result of the virus. The unemployment insurance claims data out today show that as of June 13, there were 31.5 million workers claiming unemployment benefits in all programs. Comparing those two figures suggests that more than 100% of people out of work as a result of the virus are claiming unemployment benefits. However, this direct comparison is problematic. For example, some part-time workers are receiving unemployment benefits, but they aren’t counted in the 24.5 million because that figure only includes people who aren’t working. It is also likely that there is some double-counting of benefits claims. But nevertheless, it clear that a large share of people who are out of work as a result of the virus are on unemployment insurance, and that is good news.

Unfortunately, deepening pain is on the horizon. As bad as the labor market is, it’s likely that June is a temporary respite from the storm. Given the increase in coronavirus over the last couple of weeks along with re-shuttering of businesses as well as the pending expiration (on July 25th) of the $600 enhanced weekly unemployment insurance benefits, June’s labor market—as weak as it is—is the best we can expect for a while. With the hit to incomes from the loss of the $600 per week UI benefit and the increasing spread of the coronavirus, economic activity will soften because people don’t have the money to spend and they are afraid to go out.

The reference period for the jobs survey was mid-June, just before COVID-19 cases began to spike. We are already hearing reports of people being laid off for the second time. As mentioned above, unemployment Insurance data since the mid-June reference week continue to show historically high initial claims—2.3 million for the week ending June 27 (including both regular state UI and Pandemic Unemployment Assistance). These are initial claims, less and less likely to be residual claims from pent up demand from the initial weeks of overloaded state unemployment insurance offices.

Further, without massive additional federal aid, austerity is certainly on the horizon for state and local governments, because state and local tax revenues are plummeting. This means losses in public sector services, including cuts to school budgets at a time when schools are already struggling with the increased need for creative options for students. Losses in public-sector employment will affect Black workers more, particularly Black women workers. The slight rise in public sector employment in June was an artificial correction given large drops in employment at periods when employment is typically stable as opposed to end of the year drops which would be captured by the seasonal adjustment. Employment in state and local government is still 1.5 million (or 7.5%) lower than February. The local public sector losses have been concentrated in public K-12 education, which was still below its pre-Great Recession levels before the pandemic hit and is now 0.7 million jobs (or 8.3%) below where it was in February.

Congress needs to act. The personal income data not only show how important unemployment insurance has been in buffering households and the economy, it also shows just how bad things will get when the enhanced unemployment insurance benefits of $600 per week expires. This economic pain is avoidable. Further, Congress needs to protect workers who have to go to work with adequate compensation and a safe work environment. And, Congress needs to provide substantial aid to state and local governments, which is essential to providing necessary services and is key to the recovery.

The data all point to more trouble to come. We are not unambiguously on an upward trajectory. Policymakers would do well to provide safeguards so that workers and their families can heed the advice of health experts without sacrificing their economic well-being.

Given the re-opening of the economy, it is not surprising that many of the job gains occurred in leisure and hospitality, construction, education and health services, and retail trade. Of particular concern are the public sector job losses. Employment continued to decline in government employment; local government education accounted for most of the decrease, with a loss of 310,000 jobs. Over the last three months, state and local government jobs have declined by 1.6 million, nearly half of them (759,000) in local government education (public K-12). These losses in public K-12 education are large, even when public schools were still in session, albeit from home, during the reference period. Further, it’s important to remember that public sector austerity in the recovery from the great recession meant that public school employment never regained its 2008 levels. Without sufficient relief to state and local governments, more cuts will come.

The unemployment rate declined to 13.3% in May, but is still up a whopping 9.8 percentage points since February. The figure below illustrates how the economic devastation was widespread but did not hit groups equally. Even with the mild improvement in May, the unemployment rate of all groups is still higher than the highest level the overall unemployment rate hit at the height of the Great Recession, when it reached 10.0% in 2009. The unemployment rates are higher for Black workers and Hispanic workers than for white workers. Research has shown that historically higher unemployment rates, lower wages, higher poverty rates, and lower liquid savings make job losses even more devastating for African American workers and their families. The unemployment rate for Latina workers was significantly higher than any other group, hitting 19.0% in May.

Jobs day

The official unemployment rate understates the extent of job loss and economic pain. Here, we calculate an “adjusted” unemployment rate of 19.7% in May, which includes those who are officially unemployed, the misclassified (the excess number of those who reported that they were employed but not at work for other reasons), and those who had been employed but left the labor force when the virus hit but would otherwise have been counted as unemployed if they were actively seeking work. The misclassified are calculated across various demographic groups as indicated by BLS’ discussion of Table C found here. They suggest that many workers who are classified as employed, but not reporting to work for “other reasons,” should be counted among the temporarily unemployed, not the employed.

Furthermore, millions of would-be job seekers have left the labor force in the time of COVID-19 for various reasons, whether it’s because they don’t see any prospects in their occupation, they are not looking because they are concerned about their health or the health of members of their household, or they have to care for a child whose school or daycare closed. When those workers, many of whom left the labor force during the stay-at-home orders, are added in to the number of unemployed, the “adjusted” unemployment rate would have hit 19.7% in May.

Nominal wages fell between April and May as lower wage workers re-entered the labor force. Over the year, nominal wage growth of 6.7% still reflects compositional changes in the labor force. At turning points in the economy, compositional effects tend to swamp any changes in wages within sectors or occupations or even workers grouped by educational attainment. As low wage workers continue to come back, wage growth will fall, as we saw in May. Stronger year-over-year wage growth between May 2019 and May 2020 still reflects the dropping of lower-wage jobs from the total, which results in higher average wages for the remaining jobs, and what appears to be faster overall growth, but not driven by people getting meaningful raises.