Perhaps the oddest thing to come out of this morning's awful monthly jobs report was the apparent jump in wages.
Average hourly earnings last month surged nearly 5% from March and were up nearly 8% from the same month last year. But it's not about people getting raises, obviously; it's because, as economist Chris Rupkey noted, "lower-paid workers dropped out of the equation" since so many of them lost work last month.
Out of all the terrible numbers in the report this morning, that's the one I find most striking, and can't get out of my head.
We can still hope this whole situation is only temporary. In fact, that's how many of those who have lost work see it. The number of workers who described themselves as on temporary layoff (meaning the expect to be called back to work within six months) jumped from under two million to over 18 million last month.
"It's high in a good way," John Briggs of NatWest told our Patti Domm. (While it's not exactly apples-to-apples, that would be the lion's share of the 20.5 million jobs the economy lost last month.)"The market could be reacting [positively] to that," Briggs said. "If you see them move to permanent, that's a problem."
And that's why each jobs report as we move through the summer and into the fall becomes more and more important. We already knew, unfortunately, that the toll of the pandemic and government shutdowns in April and May was going to be extremely high. The biggest challenge now is to make sure this high unemployment rate doesn't become chronic.
That introduces a whole other area of discussion that will come up a lot in future months: on economic dynamism, the European problems, hysteresis, etc., etc. The less we hear about it, the better a sign that the economy is recovering. Remember: we don't have to go back to the exact pre-Covid economy to get people back to work.
More headlines below. See you on Monday! (I abandoned the potty-training, in case you wanted to know :-))
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