While Thursday's jobs report from the Labor Department indicated the U.S. added nearly 5 million jobs in June, the unemployment rate likely is much higher than what is officially being logged, Axios reports.
The latest report showed 17.8 million people were unemployed but more than 31 million people were receiving unemployment benefits. On top of that, an additional 6 million Americans applied for unemployment benefits as of June 27.
The reported decline in unemployment to 11.1% is likely a result of how workers are being classified and not a reflection of an improved jobs market, Axios reports. People who are now losing their jobs due to the pandemic are classified as “out of the labor force” instead of unemployed. At the same time, people who were unemployed because of the virus are returning to work.
Economic Policy Institute economists Heidi Shierholz and Elise Gould told Axios that on top of the 17.8 million unemployed workers, there are another 2 million workers who were misclassified as “employed not at work.”
In addition, the economists said there are another 5 million people out of work due to coronavirus who were counted as dropped out of the labor force.
Total, they said there likely are about 24.5 million workers who are unemployed or out of work due to coronavirus.
"If all these workers were taken into account, the unemployment rate would be a whopping 15%,” they told Axios.
As stay at home orders have been lifted, more people have been applying for Pandemic Unemployment Assistance not less. The PUA program allowed part-time workers and self-employed people to apply for unemployment benefits that they traditionally wouldn’t have been able to receive.
Records show that the amount of PUA applications went from 9.7 million on May 23 to 12.9 million a month later. At least 1 million workers have filed jobless claims for 15 weeks in a row.
The number of people who received traditional unemployment benefits did decline by less than 1 million from May 16 to June 13.
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