President Trump is exultant over a jobs report for May that was dramatically better than economists predicted.
Employers added 2.5 million jobs in May, while the consensus forecast was for a loss of 7.5 million jobs. In a White House address filled with familiar superlatives, Trump called it a “rocket ship” recovery and predicted, “We’ll go back to having the greatest economy anywhere in the world.” The only thing that could derail that? Democrats taking control in the November elections.
The remarkable job numbers—which one economist described as “the biggest payroll surprise in history”—seems to show a quicker-than-expected recovery from widespread business shutdowns in March, April and May, as most states took drastic measures to control the spread of the coronavirus. The biggest gains came in industries hit hardest by the shutdowns, including leisure and hospitality with 1.3 million new jobs, construction with 464,000 news jobs, and retail with 367,000 new jobs.
Trump called a news conference just minutes after the numbers came out, and all but declared victory. “It’s the greatest comeback in American history,” he announced. That’s extremely premature. The unemployment rate is still 13.3%, 3.3 percentage points worse than it was at the low point of the last recession. There are also oddities in the data because of the unique circumstances involving the coronavirus shutdowns. Some furloughed workers weren’t counted as unemployed when they should have been, for instance. And the jobless numbers don’t square with the 42 million people who have filed unemployment claims since mid-March.
The gains will only seem legit if improvements continue during the next few months. Still, real workers are going back to their jobs and earning money again, an unmistakable turn for the better. And the crazy surge in the stock market suddenly seems a bit more justified. This week’s Trump-o-meter improves two notches from last week’s SAD score, to WEAK, the third-lowest rating.
The job market remains nowhere close to where it was before the virus arrived. Here are some of the changes since February, the last full month of normal economic activity:
Total employment: Down 19.6 million jobs, or 12.8%
Leisure and hospitality: Down 7 million jobs, or 41.8%
Information: Down 316,000 jobs, or 10.9%
Trade and transportation: Down 3 million jobs, or 10.7%
Professional services: Down 2.2 million jobs, or 10%
Manufacturing: Down 1.1 million jobs, or 8.9%
Local government (mostly teachers): Down 1.3 million, or 8.7%
Construction: Down 596,000 jobs, or 7.8%
Even if they could have been worse, those are terrible job loss numbers that leave deep structural damage to the U.S. economy. Congressional aid money, mainly the Paycheck Protection Program, seems to have been a large factor in keeping workers on the payroll, which would mean that program is working as intended. But that’s not the same as a robust pickup in real economic activity, and payrolls could easily drop again if consumers and businesses don’t get comfortable spending money quickly.
Trump had a terrible week, earning condemnation from military experts, some fellow Republicans and even religious leaders for the tough federal crackdown on crowds peacefully gathered near the White House to protest the May 25 killing of George Floyd in Minneapolis. Democratic presidential contender Joe Biden added to his lead over Trump in polls. There were even signs Trump’s core voters were beginning to waver in their support.
Trump desperately needed a win, and the jobs report gave him one. He probably overplayed it, and there’s a good chance Trump will be a lot quieter on future job days if there are new coronavirus outbreaks or data adjustments that count more people as unemployed. But for the moment, he can brag.
Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. Confidential tip line: firstname.lastname@example.org. Encrypted communication available. Click here to get Rick’s stories by email.