VCU-Ariz. State survey shows increased labor market activity
Drop in unemployment driven by workers finding jobs with new employers
As states have begun to reopen for business, the national labor market has seen an increase in activity during the past two weeks, according to a biweekly survey conducted by Virginia Commonwealth University and Arizona State University economists.
However, the 2.3% decrease in the national unemployment rate (which was estimated at 19.4% for the week of June 7 and 21.7% the last week in May) was driven mostly by individuals who are working for a new employer instead of returning to their former employer, according to survey results.
“Virtually all states have begun to reopen their economies. But crucial questions remain about the kind of labor market recovery we are likely to see,” said Adam Blandin, the VCU School of Business assistant professor who conducted the survey with Alexander Bick, an associate economics professor at Arizona State. “Will we see a V-shaped recovery, where employment declines sharply, but then recovers almost as quickly? Or will we see an L-shaped recovery, where employment declines sharply and then does not recover for several years?
“Our estimates provide a preliminary view of labor market conditions, and suggest that the answer is somewhere in between these two stories,” Blandin said in a statement. “Specifically, employment has increased notably in the last month, but still remains well below its pre-crisis level.”
The most recent survey results also show that among those who had been employed in February, 36.5% of them have experienced a loss in earnings, but roughly one-third of those earning less are still working.
Real Time Population Survey results are released every other week to reduce an information lag, as U.S. Bureau of Labor Statistics labor market figures are collected once a month and published with a three-week delay.
The survey closely follows the methodology of the U.S. Bureau of Labor Statistics’ Current Population Survey. Blandin and Bick have made improvements with each survey wave and plan to continue refining their methodology going forward.