Job Growth And Ignoring Covid-19 Start To Clash

The March 2021 job report is exuberant: 916,000 new jobs (which largely probably means resumed jobs) broadly spread across industries, with leisure and hospitality, public and private education, and construction leading the gains.

Not only were March numbers almost 40% higher than expected, according to a statement from Anu Gaggar, Senior Global Investment Analyst for Commonwealth Financial Network, but the report showed January and February revised upward to 233,000 and 468,000 new jobs, respectively.

That’s great news from one vantage. Getting the economy up and working again is critical for the fiscal health of the country and millions of people, many of whom are low-income.

But are states and cities taking too many chances in rushing to reopen? Here’s the latest daily new case plot from Johns Hopkins:

The numbers into April 1 are by no means the largest seen. Last fall was massive at more than 90,000. They did plunge, but only until March. Even with vaccinations ramping up, we’re at a secondary high.

As of April 2, Johns Hopkins notes that the number of new daily cases rose to 79,029 and the number of deaths, 1,064.

Is there a proof of causation? No, but the correlation of a lag between people being exposed and then coming down with the virus is marked and should raise suspicion. Openings, with blessings of governors, last summer preceded the September/October spike. End-of-year holidays and then more openings in February came before the current surge.

There is a reason that CDC director Rochelle Walensky was close to tears the other day as she pleaded with people to continue their efforts to mitigate the disease. As former professor at the Harvard Medical School and Harvard School of Public Health—otherwise known as a relevant medical expert—Forbes contributor William A. Haseltine noted:

Our failure to fully control the pandemic in the early days has led to the proliferation of the variants. The variants are far more contagious than the original SARS-CoV-2 strain and make up an increasing number of cases across the country. Florida has seen cases of the B.1.1.7 variant double from 1,075 to 2,330 and Brazil variant P.1 almost double from 19 to 42 cases in just the last week. With the relaxation of Covid-19 restrictions in many states and the highest rates of travel during the pandemic, our population is even more vulnerable to infection. Last week, I wrote about how careless spring break parties will contribute to a surge in cases. Seeing behaviors like these that could leave hundreds or thousands of more Americans dead is more than enough reason to cry.

There are human costs to carelessness and wishful thinking, and there could be an economic price to pay as well. Business owners and executives are desperate—rightly so. Many small companies will never come back from the impact they have felt. The Census Bureau small business weekly pulse survey shows some grim numbers across all industry sectors:

• Business has returned to normal level of operations: 13.0%
• Percentage expecting more than six months before returning to normal operations: 39.1%
• About 7.2% have cut their number of employees.

Data and an analysis from Yelp last September suggested that half of businesses that closed during the pandemic will never reopen.

That brings us to a delicate balance. Continued economic shutdowns prevent life from returning to whatever the new normal will be.

And yet, attempts to push reopening too fast seems to result in cases increasing, which eventually will create pressure to increase closures again.

Official unemployment is down to 6% again. Real unemployment, taking into account people marginally attached to the labor force (not looking for work but wanting it and having looked in the last 12 months) and those working part-time because they can’t get full-time work, is at 10.7%. That is the sort of number you’d expect to see in a recession.

The impact of unemployment is also spread unevenly. For whites, it’s 5.4%. For blacks, 9.6%. Asian, 6%. Hispanic, 7.9%. Numbers for men and women are also uneven. In several cases, unemployment for women seems lower, but they’re also out of the labor force in larger numbers than men.

That’s the long way of noting significant problems in the labor market. Although things seem on the mend, the soonest experts see all lost jobs reclaimed is the second half of 2022 at the earliest, according to the Wall Street Journal.

Now is not the time to race ahead and assume all will be fine. Evidence suggests that not to be the case. Better to build the foundation, and keep businesses and individuals supported, than to roll the dice and lose.