I am a bit taken aback at how shocked so many are about the new jobs report showing that net hiring in May was positive. For regular readers here I have made several posts here noting that the US economy was almost certainly growing, probably for at least a month. The most recent was my one a few days ago on Rising Oil Demand, and an earlier one, where I was vaguer about the US economy, was the one on Rising Carbon Emissions. It has been clear to me that the US economy hit bottom in terms of output about a month ago, which put it about a month behind the world economy as a whole and two months behind China. All of this correlates with how the relative patterns of the pandemic have gone, with China a month ahead of most of the world and about two months ahead of the US. I think it has been pretty clear that US GDP has been growing, so nobody should be all that surprised that the labor market has turned around and net hiring is now positive.
How did all this confusion come about? I think the issue is that we get weekly reports on fresh layoffs as measured by new applications for unemployment insurance while we only get monthly reports on net hiring, with our monthly BLS reports such as the one that came out today and surprised the heck out of so many observers who should have known better. I note that I did not forecast an increase in net hiring, but I had avoided making any forecasts on employment beyond the comment that it is a lagging indicator behind output, which would allow for net hiring to have still been negative. But I was somewhat mystified by what seemed to be such an disjuncture, clear evidence GDP was rising while there were these ongoing weekly reports of many more getting laid off.