New York has a long path to recovery after a two month free fall in which private sector payrolls in the were been trimmed by close to 1.6 million
A struggling New York economy inched ever so slowly back to recovery in May, gaining 137,000 jobs representing a small fraction of the jobs lost in the coronavirus shutdown.
Tempering the positive numbers, which followed two straight months of losses, are nagging first-time unemployment claims, which have been steady in the 90,000 range for at least three weeks, a seven-fold increase from a year earlier.
New York’s May jobless rate dropped to 14.5% from 15.3% percent in April. A year ago, the unemployment rate was 4%.
Job cuts have eased. The pace of layoff notices filed with the state Department of Labor has slackened in recent weeks, with 33 filed in the past week, compared to 215 notices filed between the week of March 30 and April 3.
Nevertheless, New York has a long path to recovery after a two month free fall in which private sector payrolls in the were been trimmed by close to 1.6 million — a 20% decline — since before the pandemic.
The state lost every job gained since 2008-2009 Great Recession. New York’s total private sector job count dropped to the lowest point for May since 1997.
As of Friday, nearly 1,500 layoff notices were filed to the state Labor Department since NY-PAUSE was initiated in mid-March, more than the combined total for the past three years. Employers with more than 50 workers are required to notify the state labor department of job actions.
Every metro region in the state reported double-digit percentage job losses from a year ago, with Watertown-Fort Drum leading the way with 24.1% loss, followed by Westchester-Orange-Rockland at 21.1%, and Buffalo-Niagara Falls at 20%.
Employment in the state’s leisure and hospitality category was devastated by pandemic-related closures, losing 601,000 jobs — a stunning 62% of the total — from a year ago.
Dentists offices too took a major hit, according to statistics gathered by the state Department of Labor, as 38,000 people, seven out of even ten persons employed in the category, found themselves out of work. Dentist offices were ordered closed, except for emergencies, during the virus outbreak, with restrictions eased on June 1.
Not unexpectedly, hospital employment remained steady, losing 6,700 people, just under 2%, from their ranks from a year ago.
Damage from the pandemic is likely to linger. Top economists predict that about half the lost jobs will be recovered during the second half of 2020 and that unemployment will remain elevated at about 10% by year’s end.
Across the nation, about 1.5 million workers filed applications for unemployment insurance for the first time last week, the Labor Department said Thursday. That pushes the running tally of those who have made initial claims over the past 13 weeks to a mind-boggling 45.7 million.
The count of 1.5 million is down from 1.57 million the prior week and marks the 11th straight weekly decline since first-time claims peaked at 6.9 million at the end of March. Last week’s drop, however, was by far the slightest since that streak began, and first-time claims edged down by just 58,000.
One explanation is that layoffs have spread from the travel, restaurant and retail industries that have been hit hardest to sectors such as administration, education, manufacturing and professional services.
Another reason initial claims remain high is that many states continue to work through a large backlog, according to Contingent Macro Resources. Many unemployed Americans have been unable to file first-time claims because of swamped phone and computer systems.
The weekly tallies remain far higher than the previous record of 695,000 initial unemployment claims during a deep recession in October 1982.
“These are disappointing numbers and serve to emphasize that a full recovery is going to take a long time,” says economist Ian Shepherdson of Pantheon Macroeconomics.