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We are expecting another massive drop in payrolls this time around. However, we don’t expect it to be as dramatic as last month.

Just how bad the numbers will be might have more to do with timing than the underlying situation in the economy.

Tracking the number of jobless claims during the month, it was around mid-May that the number of people receiving unemployment benefits turned around. This, of course, coincides with the move towards reopening the economy, an uneven process across the states.

The question is how much lag time is there between the economy reopening and people reporting that they have returned to their jobs.

The Incentive Issue

Rather controversially, perhaps, depending on prior job and location, many people saw their incomes increase. This was a consequence of the additional funds coming in through government assistance programs.

This might make many employees reluctant to return to their jobs, and employers reluctant to bring them back unless they are strictl...

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