By Isaac Cohen*
Defying almost every prediction, in May, the US economy added 2.5 million new jobs, pushing down the unemployment rate to 13.3 percent, from 14.7 in April. The figure was surprising because worst losses were anticipated, given the abrupt and deep economic crash caused by the lockdown required to stop the spread of the coronavirus. The outlook is so uncertain that the good news of the reduction of 1.4 percent in the unemployment rate was highlighted, despite the fact that the unemployment rate still is 4 times higher than the 3.5 percent registered last February.
Several sectors registered job gains, 1.2 million in leisure and hospitality, 368,000 in retail and 312,000 in health care, with many small businesses in those sectors benefitting from government support. According to the Census Bureau, by mid-May, 75 percent of small businesses in the food and beverage sector had received loans from the government Paycheck Protection Program, which may become grants if the companies retain their workers. Even so, among the 21 million unemployed, 17.6 percent of Hispanics and 16.8 African Americans were jobless.
The question now is if there will be more government support to pull the US economy out of the recession which started last February, defined by the National Bureau of Economic Research as a period of “significant decline in economic activity spread across the economy.” http://www.nber.org/cycles/june2020.html
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, TELEMUNDO and UNIVISION and other media.
