The U.S. Department of Labor (DOL) said the nation’s unemployment rate was 13.3 percent in May, but a closer look shows that the number is actually more than three times as large.
CNBC reports that nearly half of the population is jobless. The employment-population ratio, the number of employed people as a percentage of the U.S. adult population, was 53 percent last month, meaning 47 percent of Americans are without a job, according to the Bureau of Labor Statistics (BLS).
As COVID-19 forced the shutdown of the nation’s economy, the share of the population employed fell from a high of 61 percent at the start of the year. The post-war record came in 2000 at 65 percent.
Unlike the DOL’s monthly jobless report, the BLS ratio counts adults not in the labor force and captures those who were discouraged about the prospects of finding a job. The DOL’s unemployment rate simply tracks people looking for a job, the network reported.
“To get the employment-to-population ratio back to where it was at its peak in 2000, we need to create 30 million jobs,” Torsten Slok, Deutsche Bank’s chief economist, told CNBC.
This week, the DOL will release the June jobs report for an update on the pace of the labor market recovery.
A survey of economists by Dow Jones predicted that nonfarm payroll will rise by 3.15 million in June after a surge of 2.5 million last month, the biggest jobs increase ever in a single month, the cable station reported. Dow Jones expects the unemployment rate to fall to 12.4 percent in June.
“Right now, the economy’s recovery is being dragged down by the millions and millions of Americans without jobs and [who] simply haven’t got it,” Chris Rupkey, MUFG Union Bank’s chief financial economist, said in a note. “The massive job losses mean the economy isn’t out of the woods yet.”
A PYMNTS analysis earlier this month found that while the unemployment rate fell in May, at least part of the gain was due to the Paycheck Protection Program (PPP). The measure, key to keeping small to medium-sized businesses afloat, will soon come to an end.
Last week, the nation’s economic recovery data was mixed. The number of Americans who filed jobless claims was higher than expected at 1.5 million, while durable goods orders rose by nearly 16 percent in May.
The number of Americans seeking unemployment benefits fell for the 12th consecutive week to 1,480,000 from a revised 1,508,000 a week earlier, as the slow U.S. economic recovery continues, according to DOL.