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I guess I’ll do some jobs numbers interpretation tweets ahead of time this month:
Normally, the jobs numbers are a great summary measure of how the economy is doing. If you’re only going to watch one indicator, there’s a reasonable argument for making it the jobs number.
Normally, the jobs numbers are a great summary measure of how the economy is doing. If you’re only going to watch one indicator, there’s a reasonable argument for making it the jobs number.
But things are far from normal. Jobs are still good in that they get people money to buy things they need. But they may also be bad if they’re done under unsafe conditions that exacerbate the spread of COVID.
Relative to spring and summer, current policy conditions enhance the aspects of increasing employment that are good (the at-best hazy outlook for additional support from fiscal policy makes having money to buy things more important).
But prevailing public health conditions also make the bad aspects of increasing employment worse (cases, hospitalizations, and deaths are all very high, so increased interpersonal interaction comes at higher risk of personal illness and increased transmission).
The tone of coverage over the last few months has been that monthly job growth in the 100s of 1000s to millions is basically good, but perhaps not good enough given the size of employment losses early on. This is at best incomplete.
Continuing to treat jobs numbers as a sufficient statistic for the state of the economy ignores ways in which changes in employment may contribute to spread of COVID. Of course, this is really hard to measure/know, but that’s not a good reason to ignore it - provide context!
Without knowing how safely new jobs are being done, it’s tough to know if employment growth is “good.” It’s certainly good that workers have money, especially given the lack of policy support. But it’s bad if they and others are exposed to greater risk.
In a sense, this situation is analogous to opening to trade: most people remain healthy, maybe earn more, have more pleasant daily lives, while a few people die. Not obvious that this is good!
This month, it looks like we may see employment decline. For the same reasons, it’s not obvious that this is bad (maybe fewer people will get sick and die). https://twitter.com/ernietedeschi/status/1334595848085377030
But if the approach of basically ignoring COVID transmission risk for the sake of letting people work to earn money they need has stopped producing gains on its target outcomes, it’s probably time for a new approach.
The new approach could even be the same as the old approach: provide people with enough financial assistance to get by without having to put themselves and their families, neighbors, etc in risky situations. With vaccines on the horizon, it wouldn’t even have to last that long!
