The Bureau of Labor Statistics released its monthly jobs report earlier today. This is the last report before pandemic unemployment benefits are eliminated across the entire country on September 6 and thus gives us the last bit of labor market information we will have prior to this massive policy change.
According to today’s report, non-farm payrolls increased by 235,000 people last month, bringing the total number of non-farm employees to 147.2 million people. This number is still 5.3 million below the employment level in February of 2020 right before the COVID pandemic hit the country.
In June and July of this year, non-farm payrolls increased by about 1 million jobs each month. The August number is far below that 1 million job benchmark and likely reflects certain economic difficulties resulting from the latest spike in COVID cases, hospitalizations, and deaths.
As we face down massive cuts to unemployment benefits in just 3 days, it can be useful to reflect one more time on what all the data is telling us about the wisdom of these cuts:
- The DOL UI data shows that 9.3 million people are currently receiving benefits from pandemic unemployment programs and will see those benefits cut on September 6.
- The Census Household Pulse Survey indicates that the average household size of UI recipients is 3.8 people. Thus around 35 million total people live in households that will experience a benefit cut.
- The BLS state payroll data shows (I, II) that states that eliminated pandemic unemployment benefits earlier this year did not see employment grow faster than states that retained them.
- The Census Current Population Survey also shows that states that cut the benefits did not see employment grow faster than states that retained them.
- The Census Household Pulse Survey also shows that states that cut benefits did not see employment grow faster than states that retained them.
- Bank transaction data studied by Coombs et al. shows that UI recipients in states that cut the pandemic benefits earlier this year had their net income decline by $264 per week ($13,728 annually) and their spending decline by $145 per week ($7,540 annually).
- Finally, today, we learn from the BLS establishment survey that employment is still 5.3 million jobs below the pre-pandemic level and that, even in the best case scenario, it will take at least 5 months to fill that job gap.
Taken together, it is impossible to justify the brutal UI cuts that are coming on Monday.