The latest jobs report shows the national unemployment rate at 13.3%, which is 10% below the peak of 14.7% during the height of the COVID-19 pandemic. To provide more context at the city level, WalletHub today released its report on the Cities Whose Unemployment Rates Are Bouncing Back Most, as a follow-up to our report on the States Whose Unemployment Claims Are Recovering the Quickest.
This report uses new data from the Bureau of Labor Statistics, which recently disclosed that it erroneously didn’t count many workers on temporary layoffs as unemployed. Therefore, the real unemployment rate may be around 23 percent higher than reported, and our report includes both the official rate and an “adjusted” rate based on this error.
Below, you can see highlights from the report, along with a Q&A.
Change in New York Unemployment Due to Coronavirus (1=Most Recovered, 90=Avg.):
- 328.15% Change in Unemployment (May 2020 vs May 2019)
- 663,500 unemployed people in May 2020 vs 154,968 in May 2019;
- 70th worst recovery in the U.S.
364.55% Change in Unemployment (May 2020 vs January 2020)
- 663,500 unemployed people in May 2020 vs 142,826 in January 2020;
- 30th worst recovery in the U.S.
18.20% Official Unemployment Rate (May 2020) (Adjusted Rate*: 22.44%)
- 22nd highest unemployment rate in the U.S.
*Adjusted for the BLS error that failed to classify workers on temporary layoffs as unemployed.
How can unemployed people prepare for the extra $600 per week in benefits to potentially end in July?
“In preparation for the extra $600 per week in benefits to potentially end in July, unemployed people should draw up a monthly budget and see what non-essential purchases they can cut back on in order to avoid any difficulty paying bills. Those who are fortunate enough to have money left over in the weeks leading to the reduction in benefits should put that extra money into savings,” said Jill Gonzalez, WalletHub analyst. “People who are unemployed should make finding a job their top priority by dedicating extra time to job searching and being willing to find temporary work wherever they can. Some of the best places to look for work include essential businesses, retail stores and other places that are among the first to reopen, and companies that regularly do remote work, such as tech support.”
Will promoting social distancing in public help cities’ unemployment rates recover more quickly?
“Promoting social distancing in public will have a positive impact on the recovery of cities’ unemployment rates. WalletHub’s research shows that around only around 30 percent of consumers would be comfortable shopping in person without protective measures, but another 47 percent would be comfortable if various protections were put in place, like mandatory mask wearing or plexiglass shields at the register,” said Jill Gonzalez, WalletHub analyst. “Social distancing while reopening inspires greater consumer confidence, which in turn will lead to more people shopping and a greater cash flow to businesses, enabling them to start hiring again sooner.”
How are city budgets affected by the coronavirus crisis and resulting unemployment?
“Many cities are experiencing massive budget deficits because of the coronavirus crisis, and this will only become more difficult to manage as cities continue to struggle to support affected industries,” said Jill Gonzalez, WalletHub analyst. “Without federal help, many cities may be forced to make big cuts to their budgets, to the detriment of education, recreational programs and other important services that take a backseat to immediate health concerns.”
Why have certain cities experienced greater rises in unemployment than others during the coronavirus pandemic?
“Certain cities have experienced greater rises in unemployment than others because their industries were highly affected by the social distancing policies put in place due to the coronavirus pandemic,” said Jill Gonzalez, WalletHub analyst. “Cities that rely heavily on travel and tourism have seen those industries closed for months, which has naturally led to greater layoffs than in cities where the main industries are the production of essential, non-durable goods like food and medical equipment.”
How has New York City’s unemployment rate been affected?
“New York City has experienced a 365% increase in unemployment from January 2020 to May,” said Jill Gonzalez, WalletHub analyst. “This is worse than the average increase of 260%. New York City’s overall unemployment rate is 18.2%, compared to the average of 13.3%.”