UNEMPLOYMENT | Local Rates Higher

June 5, 2020—New Yorkers have a feel for these things and they are surprised at a reported U.S. unemployment rate of 13.3 percent. Economic analysts surveyed by Dow Jones expected nonfarm payrolls to decrease by 8.3 million while their average estimate of the May unemployment rate was 20.5 percent.

The BLS actually reported this morning a 2.5 million increase in payrolls, the largest increase on record.

One explanation is that in New York City the unemployment rate might be much higher. Using a simple forecasting model based on April and prior months, the New York City unemployment rate for May would be above 20 percent, i.e., 21.6 percent.

Here are the May numbers for New York City and neighboring counties, as projected from prior months. All of these actual BLS numbers for May will not appear until close to the date when the national unemployment rate for June is released.

Unemployment Rates - U.S. and Local, May 2020
	U.S. Rate, %	Projected Local Rate, %
New York City	13.7	21.6
Nassau Co.	13.7	15.1
Suffolk Co.	13.7	15.7
Westchester Co.	13.7	14.1

Source: May unemployment rate from BLS. Projected

May local rates by CityEconomist.

For the future, New York City may outperform the rest of the country because it has been through the coronavirus mill earlier. It has just had its first day since March 12 without a confirmed coronavirus death.

(Hat tip to Dr. Jurgen Brauer, Geoffrey Hilton and Dr. Farid Heydarpour for assistance with the interpretation of the data.)