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Why flat permanent job loss in the month of July is concerning: Economist

The U.S. added 1.76 million jobs in July, more than expected. Labor Department Chief Economist and Rutgers University Professor Bill Rodgers joins the On the Move panel to discuss.

Video Transcript

ADAM SHAPIRO: Let's turn our attention to something that should bring a bit of a smile to people's faces, and that was the July employment situation report. Bill Rodgers is the former chief economist at the US Labor Department and a professor at Rutgers University. He joins us now to talk about many things in this jobs report.

It seems to be a good report, but there was one thing that jumped out, Bill, that had to do with the unemployment rate for African Americans, 14.6%, showing little change over the month. Whereas the unemployment rate for white Americans was down to 9.2%. What's going on here?

BILL RODGERS: Well, this-- this is one month. Because if you do look over the last few months, you do see African American jobless rates also falling, falling, and falling a bit. But you know-- but the pause in the fall could be a-- a forecast of something that we usually see in recoveries, that-- that whites, and Asians, and other individuals tend to come back to work, or get rehired, or get hired faster-- faster than African Americans. And some of that is because of education differences, skill differences, but also as a consciousness have been awoken around the continued amount-- a great deal of racism that exists in the economy.

JULIE HYMAN: Bill, overall, there are still 14 million fewer jobs in the US than there were back in February. And one of the outstanding questions is, how much of this job loss is permanent, right? Is there anything in today's report that give us more clues on that question?

BILL RODGERS: Well, there are two statistics, I believe the one indicator on whether the job loss is temporary and then whether the job loss is permanent. This-- this month's report suggested there was a decline in joblessness associated with being temp-- being temporary, which is good news, that people who had been temporarily laid off or furloughed were coming-- came back during-- during this month. But unfortunately, the indicator on whether your job loss was permanent, that seemed to have remained flat. So you know, we will definitely continue to be monitoring that over the-- over the ensuing months.

DAN ROBERTS: Bill, Dan Roberts here.

BILL RODGERS: Hey, Dan.

DAN ROBERTS: Obviously, good to see the unemployment number drop. But of course, the number of jobs added was so much greater in June than July. And I guess at first glance that would imply that maybe things troughed in May, and July would have been, I guess, the biggest bump we'll see.

But of course, we also always see numbers being revised up or down after the fact. And so I guess I'd ask you, isn't it possible that coming up, especially with the unemployment rate still very high at 10-point something percent, that we'll see another month with as many jobs added as were added in June, that we still could see another big kind of blowout month where a lot of people do get back to work?

BILL RODGERS: Yeah, I'm-- I'm hesitant to-- to think that we're going to see a big bob like we saw with that 4 million. I think, you know, what's going on is-- like here in New Jersey, I work on the governor's Restart and Re-opening Commission. And as we move to stage one and stage two, right, that think of the spigot turning water on, right, that you've got a big flood, big rush of flow of people wanting to buy, wanting to consume, wanting-- and then, also, then hence, needing to work.

But as we move up the curve, right, I think it's going to be a little more challenging. Why? One, because as we start to get back out into restaurants, into stores-- and we're seeing it, the-- the positivity rates have been rising in about 35 states. You know, 35 states have positivity rates that are-- that are exceed 10%.

So-- so that's going to kind of sort of push-- put some pressure on, right, the challenge to be able to have those big blowout numbers, that it's going to be the first initial ones are big, hit them hard, but then there's a sort of diminishing returns, this concept we call in-- we talk about in economics. So I think we're still going to see job growth, but-- but by the time of the election, I don't think we'll be back to the-- the numbers that we had prior to the pandemic.

AKIKO FUJITA: Bill, how much of the rehiring that we saw, particularly in leisure and hospitality, do you attribute directly to the Paycheck Protection Program? And you know, one of the numbers that we got today suggests in terms of the amount of stimulus that's still needed to keep some kind of momentum going.

BILL RODGERS: Yeah, I-- in terms of a specific estimate, I'm hard-pressed to go there. But I think, you know, the PPP definitely played a role. But also, and I need to reference back to my own state, but I'm involved in this Re-opening Commission, and we've been working hard on educating small businesses, in particular, to make sure that they get the proper PPE, right, into-- in their workplace, and also making sure that they're doing the proper sanitizing of the workplace, such that they can make the-- make work attractive.

I mean, I'm-- I hear Larry Kudlow earlier this day, this morning talking about, well, you know, people don't have the incentive to come back because these benefits are-- UI benefits are so high. Well, I think part of it is particularly, and particularly for minorities, that they're nervous. They want to come back to safe-- safe workplaces, and now fair workplaces. So along with the triple P, the Paycheck Program, PPE, and also sanitizing, right, that's going to-- if we continue to keep on doing those kind of things, we'll-- we'll see this continued growth.

ADAM SHAPIRO: Bill Rodgers is a former Labor Department chief economist, also a Rutgers University professor. It's always good to see you. And we are glad you are healthy. Stay that way, sir. See you next time.

BILL RODGERS: Thank you, Adam. Likewise.