Look behind the headlines of May's unemployment figures. The "improvement" in the number of jobs lost was no improvement at all. Sure, the loss of 345,000 jobs in May sounds better than the 504,000 jobs lost in April. But let's get one thing straight: the May number does not replace the April number. It adds to it. Things have gotten worse.
And things have gotten worse, it can be argued, at the same rate. Hours were reduced for many retained jobs, as workers were sent home on unpaid furloughs rather than fired. The shortening of the average work week in May by 0.1 hours, spread over the entire workforce, was the payroll equivalent of 250,000 lost jobs. Add that number to the headline number, and we're back to approximately 600K, the norm for the last six months.
Digging deeper, we find that one part of the workforce is adding jobs: those 55 and older (see chart above). Their retirement nesteggs decimated by back-to-back busts in stock and home values, these folks are highly motivated to remain in or to re-enter the workforce. Their earnings will be used to rebuild net worth, not to consume. Displaced are Generations X, Y, and Z, who collectively lost over 6 million jobs over the past year. They would be the ones more likely to spend their paychecks, increasing the velocity of money and stimulating the economy. But ya can't spend what ya don't earn (and can no longer borrow).
With Baby Boomers cannibalizing the job prospects of younger workers, economic recovery will not come anytime soon.
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