If you heard the jobs report and the stock market news last Friday, you would have thought we were just about all the way back! President Donald Trump held a press conference shortly after the report was released and said it was “stupendous”. In May, we actually ADDED 2.5 million jobs, and unemployment tracked in at under 14 percent.

 

The doom and gloom experts thought it was going to be 20 percent. After all, in April, it was reported by the government that we lost 20 million jobs. So, how was the government wrong? Were the numbers tampered with?

 

Most believe that the people who work for the Department of Labor are honest, trustworthy workers, and would not have changed anything on purpose, but what if the rules change?

 

After all, what does “reclassification” mean? Recent reports from financial news outlets like “Market Insider” point out that the unemployment rate would have been 20 percent higher had it not been for some “adjustments”.

So, how is a person who was once technically employed but later absent from work classified? What is considered a “temporary” job? How does the Department of Labor know for sure that people who have lost their jobs will be rehired? How does an unemployment claim all of a sudden become a “furlough-based” claim?

 

The Market Insider report might show the biggest hint. In May, the industries with the biggest job gains were leisure and hospitality, retail, and education and health services – mostly low-wage and low-hours service sectors. Really? They were open? They were thriving? Of course not! They were all closed! So, who got paid but did not work?

 

The Payroll Protection Program (PPP), the governmental forgivable loan / grant program has come into play in this context. After all, businesses can only get the loan if they agree to put staff back on the payroll. If they apply 75 percent of the money received to payroll costs, then the PPE constitutes a grant – FREE money. The PPP numbers were added into the rolling unemployment reports starting May 1st.

 

But will these jobs be permanent? Will our economy start humming again? Undoubtedly it will, in our opinion, though we could be looking at, at least six months from now as to when that occurs, and save for any other American crisis. And yes, we also could be looking at a transformation as we also believe labor’s 15 percent payroll will be based on “stay at home” jobs.

 

Government, between handling the “economic stimulus”, “business loans”, and “2019 tax season”, has done a great job under these historic circumstances, but this will truly not be enough. We need massive consumer spending! This will be a slow process, since it will be hard for one to spend on anything other than basic necessities as one wears a mask and gloves.

 

Hey! I wonder if they are counting the mask makers?

 

Professor Anthony Rivieccio, MBA PFA, is the founder and CEO of The Financial Advisors Group, celebrating its 24th year as a fee-only financial planning firm specializing in solving one’s financial problems. Mr. Rivieccio, a recognized financial expert since 1986, has been featured by many national and local media including: Kiplinger’s Personal Finance, The New York Post, News 12 The Bronx, Bloomberg News Radio, BronxNet Television, the Norwood News, The West Side Manhattan Gazette, Labor Press Magazine, Financial Planning Magazine, WINS 1010 Radio, The Co-Op City News, The Bronx News, thisisthebronX.info and The Bronx Chronicle. Mr.  Rivieccio also pens a financial article called “Money Talk”. Anthony is also currently an Adjunct Professor of Business, Finance & Accounting for both, City University of New York & Monroe College, a Private University. You can reach Anthony at 347.575.5045.