Economist Krugman on Today’s Jobs Numbers: ‘This Looks Like a Real Number’

Economist Krugman on Today’s Jobs Numbers: ‘This Looks Like a Real Number’

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Janet Ybarra
Democrat
Former Washington Journalist
Contributor on The Bipartisan Press

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After the Friday release of the federal government’s shockingly good jobs numbers, some worried that Trump administration officials were cooking the books in an effort to aid Donald Trump’s re-election bid. But that doesn’t appear to be the case, according to economist and New York Times columnist Paul Krugman.

In the midst of the economic fallout from the novel coronavirus pandemic, the Bureau of Labor Statistics (BLS) announced that the US unemployment rate unexpectedly had dropped to 13.3 percent, from 14.7 percent.

Experts had predicted that the unemployment rate would climb as high as 20 percent, or perhaps a little more.

However, the government reported that the economy gained 2.5 million jobs in May, as many states and counties began to reopen with the slowing of coronavirus cases nationwide.

“Yes, the thing about it is that you still have a very professional staff. The director of the BLS, Bureau of Labor Statistics, is a Heritage Foundation guy, but the staff is very professional, and these numbers would be extremely hard to cook,” Krugman said, referring to the head of BLS, William Beach, and his former employer, a conservative think tank. “I think it would require a level of competence, understanding, to cook these numbers that we don’t see in this administration, so I think we can say, and the numbers, when you look in the details, they actually do make sense, they tell us a story, so don’t conspiracy theorize, you know, anything with this administration, always exercise caution, but this looks like a real number.”

Just because the May jobs report was so positive is not entirely reason to celebrate, Krugman added.

“What’s happened here is that the economy, after saying that we are in a medically induced coma, where lots of stuff has been shut down necessarily, to contain the spread of COVID, and what has happened now, we’ve loosened and we’ve come slightly out of it,” he said. “And if you look at where the jobs have been gained, it’s restaurants, retail, shops, and dentists. Dentist offices. And that’s saying, ‘Well, we’ve had a little bit of relaxation of social distancing and people are able to resume some, a small part of the activities that have been put on ice for the past few months,’ and that fits together. That’s a story, kind of goes along with other data, and it is kind of odd, I didn’t understand why some of the economists were expecting a much worse number. I thought it would be more like zero or a little bit negative, but that’s the story, and it’s not in any sense saying we’re out of the woods.”

Some 30 million workers remain jobless, however, still the highest level of joblessness since the Great Depression nearly a century ago.

Friday’s such positive numbers actually make Krugman more pessimistic, he said.

“Oh, this has made me more pessimistic where we will be by December because it seems to me that this, these good numbers make it less likely that unemployment benefits will be extended,” he said. “They make it less likely that we will exercise caution in opening. So the premature relaxation, the social distancing, which was already taking place, which probably accelerate, so I actually think that once you take into account the likely political reaction, this was actually, you know, we would have been better off if the numbers had come in worse.”

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