Looking Backward (to June)

In these times of coronavirus, time becomes blurry and events quickly overtake us. However, with all the caveats about the distortions the pandemic has caused in official labor-market data collection, there did seem to be signs of recovery back in June - just a month ago. The U.S. Bureau of Labor Statistics reported earlier today that the official unemployment rate fell in California from 16.4% in May to 14.9% in June.

Nonfarm payroll employment in California in that interval rose by 3.4%.*

Unfortunately, as we have noted in prior posts, the improvement accompanied a relaxation of the shutdown which led to increased public circulation for both recreation and protests around the Memorial Day weekend. With a lag, as might be expected, new cases of coronavirus followed that circulation, leading to a return to more restrictions on economic and social activity. We noted yesterday that there are now signs of a stall in the state's labor market based on new unemployment insurance claims data.**
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*https://www.bls.gov/news.release/pdf/laus.pdf.
**https://uclafacultyassociation.blogspot.com/2020/07/stall-warning.html.