Jobless rate drops to 13.3% as U.S. adds 2.5M jobs
May report a positive surprise as Pa. reopens
The U.S. unemployment rate fell to 13.3% in May from 14.7%, and 2.5 million jobs were added — a surprisingly positive reading that reflects a time when Pennsylvania is reopening parts of the economy.
Nationally, the May jobs gain reported by the Department of Labor on Friday suggests that businesses have quickly been recalling workers as states have reopened their economies. Across the Keystone State, different regions are reopening at different rates, following a county-by-county phased reopening plan implemented by Gov. Tom Wolf’s administration.
In Fayette County, which had the highest unemployment rate in the Pittsburgh metro area in April at 20.5%, Nemacolin Woodlands Resort has been calling back employees as COVID-19 restrictions have eased.
“As one of the largest employers in Fayette County, we had a responsibility to our people and the community to reopen as soon and as safely as we could,” Christopher Baran, director of sales and marketing, said in a statement.
The Farmington resort, which employs about 950 people, has called back 600 employees who were furloughed following Mr. Wolf’s shutdown of nonessential businesses in March, Mr. Baran said.
In Washington County, the Meadows Racetrack and Casino, the county’s second largest employer with just over 1,000 employees, reopens Tuesday with about 40% of its workforce, said general manager Tony Frabbiele.
Officials at Nemacolin and the Meadows each said they planned to call back more workers as demand for services increased.
A few businesses are reporting signs of progress even in hard-hit industries. American Airlines, for example, said this week that it would fly 55% of its U.S. routes in July, up from just 20% in May.
And the Cheesecake Factory said one-quarter of its nearly 300 restaurants have reopened, though with limited capacity. Sales at those restaurants are at nearly 75% of the levels reached a year ago, the company said.
Those limited gains may lead to
more rehiring as companies slowly restart shuttered businesses.
Other evidence has also shown that the job market meltdown triggered by the coronavirus outbreak has bottomed out. The number of people nationally applying for unemployment benefits has declined for nine straight weeks. And the total number of people receiving such aid has essentially leveled off.
The overall job cuts have widened economic disparities that have disproportionately hurt minorities and lower-educated workers. Though the unemployment rate for white Americans was 12.4% in May, it was 17.6% for Hispanic Americans and 16.8% for African Americans.
Even with the surprising gain in May, it may take months for all those who lost work in April and March to find jobs. Some economists forecast the rate could remain in double-digits through the November elections and into next year.
Overhanging the jobs picture is widespread uncertainty about how long the unemployed will remain out of work. Most of the layoffs in recent months were a direct result of the sudden shutdowns of businesses in response to the coronavirus pandemic.
Though many of the unemployed have said they expect their layoffs to be temporary, many large businesses won’t rehire everyone they laid off, and some small employers might not reopen at all if the recession drags on.
‘I’m just frustrated’
For those people still relying on the unemployment system for compensation to pay their rent, utilities and grocery bills, the pandemic has introduced a whole host of problems for a system that was not designed to handle such an influx of claims.
At first, people struggled to file their initial claims. Now, they are struggling to file for continuing benefits or to receive the benefits they believe they have already been approved for, said Julia Simon-Mishel, an attorney for Philadelphia Legal Assistance, an organization that helps people navigate the unemployment system.
A lot of those problems come down to confusion with the system and what it is asking. One wrong answer on an application can hold up benefits until they get in touch with someone at the unemployment office, “which we all know is God’s work right now,” Ms. SimonMishel said.
The unemployment centers have hired additional people to help answer questions and resolve problems with claims, but many people still say it is impossible to get past the busy signal on the phone lines. The email account set up to respond to questions has a wait time of up to four weeks, according to data on the state’s website.
George Morgan, 71, of Sewickley, said he has not received any benefits in a month and a half because he cannot get hold of someone from the unemployment center to fix a problem with his claim.
The first time he filed for unemployment after being laid off from his job in the airline industry, he ran into a similar problem but was able to get it fixed in about three minutes, Mr. Morgan said. At that time, they didn’t tell him what the problem was, and he said he didn’t expect them to, but now he worries he made the same mistake again.
“I can’t say I’m mad or angry. I’m just frustrated,” he said. The people working in the unemployment centers “have been overwhelmed with a tsunami ... but I haven’t seen anything change.”
Even if the jobs come back, some workers say they won’t be able to accept the offer because of health concerns or their responsibilities as a caregiver or parent.
The Pennsylvania Department of Labor and Industry has said they will handle cases of workers refusing to return to work and still filing for unemployment benefits on a case-by-case basis. The department will determine if the worker has “good cause” for refusing work based on individual circumstances like underlying health conditions and workplace safety measures.
Still, one woman living outside of Philadelphia who had to turn down an offer to return to her job at a dentist’s office because of her responsibilities caring for her two children still had questions about how or when to file.
Her husband, who asked that the couple remain anonymous to avoid retaliation, said they had successfully filed for unemployment since mid-March when his wife’s office temporarily stopped business.
Now, they tried to file through a new system set up for people who can’t accept work because of things like child care — the Pandemic Unemployment Assistance program — but the program keeps kicking them back to filing for weeks starting in March, for which they already have received benefits.
Not wanting to risk overpayments, the couple decided not to file until they could get more answers — something they haven’t figured out how to do yet.
They want to follow the rules, they said, but cannot determine which ones to follow.
Economists say the pace of hiring could lag as a severe recession and high unemployment hold back consumer spending, the main driver of the economy.
Erica Groshen, a labor economist at Cornell University and a former commissioner of the Labor Department’s Bureau of Labor Statistics, said hiring could ramp up relatively quickly in coming months and reduce unemployment to low double-digits by year’s end.
“Then my inclination is that it will be a long, slow slog,” she said.
Until most Americans are confident they can shop, travel, eat out and fully return to their other spending habits without fear of contracting the virus, the economy will likely remain sluggish.
Even if just one-third of the U.S. job losses turn out to be permanent, that would leave roughly 10 million people out of work. That is still more than all the jobs lost in the Great Recession. A hole that size would take years to fill. Oxford Economics estimates that the economy will regain 17 million jobs by year’s end, a huge increase by historical standards. But that would make up for barely more than half the losses.
In the long term, the pandemic could affect simply where workers choose to go, said Christopher Briem, a regional economist at the University of Pittsburgh’s Center for Social and Urban Research. As it becomes clear that telework is possible for some industries and some companies, workers could change where they want to live.
“Do jobs follow people, or do people follow jobs? That’s sort of the underlying question in economic development,” Mr. Briem said.
“Teleworking opens the range of places where people live versus where they can work,” he said. “That’s a very big shift in how regions compete.”
That could be an especially drastic shift here, he said, a city once “defined by a bunch of steel mills where the workers lived in walking distance to the mills.”