Economist warns about getting too optimistic over unemployment numbers

Published: Jun. 5, 2020 at 4:51 PM CDT
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CEDAR RAPIDS, Iowa (KCRG) -Employers added more than two million jobs last month after COVID-19 forced cuts for industries across the board.

The United States Labor Department reports 2.5 million jobs added last month. That dropped the national unemployment rate to 13.3%, down from 14.7% in April. Unemployment numbers differ from the roughly 20% rate that some economics were predicting.

About half of the jobs added in May are within the foodservice industry. That was one of the hardest-hit industries during the pandemic.

Workers at 30 Hop in Cedar Rapids tell TV-9 they brought back their full staff, which is currently at 50 employees. They say it’s been busy since the restaurant on Blairs Ferry Road Northeast opened back up for dine-in.

"Having such an encouraging week this past week, we're going back into our normal hours,” said owner Darin Blum.

That helped them hire back their workers. Blum says they are getting back to speed faster than they thought they would.

"I've been very encouraged by the people coming through the doors,” he said. Again, with our outdoor dining spaces, I think that's where we feel the most comfortable right now.” While some restaurants are recouping, an economist with Iowa State thinks the recovery will be slower across the country.

"Nobody ought to be clapping their hands like this is over,” said economist Dave Swenson. “We have a long way before we climb out of this pit. We have several sectors that still aren't doing well. We've shed more than 1.4 million jobs in the government sector.”

He says one reason is that people are spending less, and businesses are also spending less. "So long as people are unemployed, and after their unemployment assistance runs out, again their ability to purchase is going to go down, and we have a worldwide pandemic,” said Swenson. “That means growth nationally and worldwide has slowed down.”

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