New survey shows labor market recovery stalling
Employment Rate, Age 18-64. Black/square data is from CPS surveys. Blue/circle data is from online RPS survey. The 95% confidence interval for estimates from the RPS survey are shaded in blue. (Courtesy VCU School of Business)
The employment rate the week of July 12-18 declined by 1.2 percentage points since late June, according to a report by economists from Virginia Commonwealth University and Arizona State University. Similarly, the unemployment rate increased by 0.9 percentage points, showing a pause in the labor market recovery.
During May and early June, the Real-Time Population Survey, conducted by Adam Blandin, Ph.D., an assistant professor in the VCU School of Business, and Alexander Bick, Ph.D., an associate professor of economics at Arizona State, reported a strong increase in employment. However, between early and late June, employment in the RPS was flat. And between late June and early July, the RPS reported a slight decline in the employment rate.
“This is consistent with other real-time economic indicators,” Blandin said. “For example, on Thursday the Department of Labor reported that new unemployment insurance claims increased last week for the first time since the start of the pandemic. A pause in the labor market recovery since mid-June may reflect renewed economic uncertainty in the midst of a new wave of infections across several states.
“It is worth emphasizing that the most recent labor market report by the Bureau of Labor Statistics reflects conditions in the week of June 7-13 — six weeks ago — and so cannot speak to these recent developments. The bureau will not issue a new report for another two weeks (Aug. 7). The RPS was designed to address this information lag by running twice as often with a faster turnaround time, while still following a similar methodology to the bureau’s main report.”
Blandin and Bick started the Real-Time Population Survey out of a desire to use their skills as economists to help policymakers, reporters, analysts and the public during the COVID-19 pandemic. Since launch, their research has been cited widely in national publications such as The Wall Street Journal, Bloomberg, Business Insider, Forbes, The New York Times and The Washington Post, and has drawn attention from notable economists worldwide.
The Real-Time Population 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.
The latest survey results reflect the week of July 12-18. Other key findings show that among those employed in both February and July, nearly one-in-five are working for a new employer relative to February. This suggests that much of the increase in employment during May and early June reflected workers finding new jobs, rather than returning to their old jobs. The Real-Time Population Survey is conducted in collaboration with the Federal Reserve Bank of Dallas. The results from this survey do not represent official forecasts or views of the Federal Reserve Bank of Dallas, its president, the Federal Reserve System or the Federal Open Market Committee.
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