Business / Economy

Trump says U.S. in 'rocket' mode after surprisingly good jobs report

AFP-JIJI, AP

President Donald Trump declared the U.S. economy in “rocket” mode Friday after data showed a surprising recovery in the coronavirus-ravaged jobs market — lifting his own sinking re-election chances in the process.

“This is a rocket ship,” Trump said in a hastily convened celebratory statement in the White House’s Rose Garden.

Where markets had been bracing for yet another worsening in the unemployment rate, the Labor Department said that 2.5 million jobs were instead added in May. That brought the jobless rate from 14.7 to 13.3 percent — not up to the feared 20 percent or higher.

The jobless rate is still on par with what the nation witnessed during the Great Depression. And for the second straight month, the Labor Department acknowledged making errors in counting the unemployed during the coronavirus outbreak, saying the real figure is worse than the numbers indicate.

Despite calling a news conference, Trump took no questions from reporters about the coronavirus pandemic and nationwide unrest over the brutal death in police custody of a black man, George Floyd.

Trump clearly didn’t want to mar the good news on jobs, which he hopes will provide a path to regaining his once seemingly solid march toward a second term in November.

After months of criticism over his hit-and-miss handling of the pandemic and outrage among even some top former aides over his suggestion of a military crackdown or police brutality against protesters, Trump is at the lowest ebb of his presidency. Polls show him losing to Democratic challenger Joe Biden.

Now with hard data to back his prediction that economic devastation from the coronavirus shutdown will quickly ease, Trump feels his political mojo coming back.

“We’ve made every decision correctly,” he stated in a blanket dismissal of critics who say his management has ranged from incomplete to shambolic.

“We had the greatest economy in the history of the world. And that strength let us get through this horrible pandemic, largely through, I think we’re doing really well,” he said.

Trump then flew off for the day to Maine, a state he hopes will help carry him over the top in a tight race against Biden.

The Labor Department attributed the job improvements to “a limited resumption of economic activity that had been curtailed in March and April due to the coronavirus (COVID-19) pandemic and efforts to contain it.”

However, as it has for the past two months, the Labor Department said the jobless rate was likely three points higher due to errors in how workers described their job status.

A separate report showing state data on weekly initial claims for unemployment benefits showed over 42 million people have lost their jobs, at least temporarily, since mid-March when the shutdowns to contain the spread of COVID-19 began.

But with a massive $3 trillion infusion of government aid, and trillions more in lending to businesses, economists say it is likely firms were able to bring workers back.

“If this sticks, and my guess is it will, we’re seeing a faster reopening than most expected, and a quicker unleashing of pent-up demand,” economist Jared Bernstein of the Center on Budget and Policy Priorities said on Twitter.

Ian Shepherdson of Pantheon Macroeconomics, one of few who anticipated positive news in the jobs data, called the report, “The biggest payroll surprise in history, by a gigantic margin.”

Gains were especially sharp in leisure and hospitality, construction, retail trade and education and health services, according to the data.

The number of workers on temporary layoff declined by 2.7 million to 15.3 million, in a sign people have been able to return to their jobs now that social distancing and lockdown rules are easing nationwide.

But Harvard economist Jason Furman noted that the reduction in temporary layoffs was “the easy part of the recovery,” and further job gains may come more slowly.

The data also reflect the time before the killing of Floyd and the ensuing nationwide protests, some of which deteriorated into widespread looting and arson.

The United States has suffered far worse job losses than other countries. European and some Asian nations have set up programs to subsidize employees’ wages and keep them employed.

A study released this week found that while the U.S. shed about 15 percent of its jobs from January to April, the loss in countries such as Germany, South Korea, Australia and Israel was roughly 4 percent or lower.

Friday’s report showed that the government continues to struggle with how it classifies millions of out-of-work Americans. The Labor Department admitted that government household survey-takers mistakenly counted about 4.9 million temporarily laid-off people as employed.

The government doesn’t correct its survey results for fear that will look like political manipulation.

Had the mistake been corrected, the unemployment rate would have risen to 16.1 percent in May, while the corrected April figure would have been 19.5 percent, rather than 14.7 percent. Taken together, the two corrected numbers show that the overall trend still holds: Unemployment is going down.

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