The United States added 1.8 million jobs in July as payroll growth slowed amid a split-screen economy that pushed employers to hire more in parts of the country that continued to leave businesses reopen, even as COVID-19 spikes have forced Sunbelt businesses to step down and out. the workers.
The unemployment rate fell to 10.2% from 11.1% in June, the Ministry of Labor said on Friday.
Economists polled by Bloomberg estimated that 1.5 million jobs were added last month.
As of the end of June, nearly half of the states have suspended or canceled reopens due to the increase in coronavirus cases, a decline that has hit Texas, Arizona, Florida and California particularly hard. Those losses were likely more than offset by net job gains elsewhere in the country as states relaxed restrictions, Goldman Sachs said in a research note.
But the job forecast for July was crap, with some economists expecting more than two million gains and others anticipating losses.
The number of Americans on temporary layoff fell from 1.3 million to 9.2 million as more laid-off workers at restaurants, malls, gyms and other outlets were recalled amid government reopening. About 56% of the unemployed were on temporary layoff, up from 60% the previous month. At the same time, 2.9 million people lost their jobs permanently in July, a figure that was virtually unchanged from June.
In June, the leisure and hotel industry, the sector most affected by the pandemic, gained 592,000 jobs, mainly in restaurants and bars. Retail trade added 258,000; professional and business services, 170,000; and health care, 126,000.
The government added 301,000 jobs as the payroll was artificially inflated by 215,000 local government education gains. Since many school staff were fired in April due to the pandemic, there were far fewer job cuts than normal in July, an anomaly that led to large job increases due to seasonal adjustments.
In addition to the reopenings, job gains in the spring were helped by federal loans repayable to small businesses as long as they retained or rehire employees. About a third of the 22 million jobs cut in the United States at the start of the pandemic were recovered in May and June.
But recovering the rest of the lost wages will likely be more difficult work as employers grapple with epidemics of infection and deplete cash flow. Many companies have used up their federal loans, forcing some struggling companies to lay off workers a second time. Morgan Stanley predicts a “significant risk” of job losses in August.
Meanwhile, the unemployed face the expiration of a $ 600 federal supplement to state unemployment benefits. Congress debates whether to renew both small business loans and at least part of unemployment benefits in new stimulus bill, but lawmakers are deadlocked on the measure .
Barb Brown, 66, of Quartzsite, Ariz., Was fired from her job as a business travel agent in March. Her boss told her she would eventually be called back, but with the business travel crisis hitting harder than maybe any other industry, she doesn’t know when.
She and her husband were relying on her roughly $ 900 in unemployment benefits, as well as small Social Security and disability benefits, to pay their monthly bills and repair their two motorhomes, which they plan to sell. Today, unemployment benefits have been reduced to about $ 300.
“Now things are going to get really tough,” she said. “It has been very, very, very stressful.”
Restoring trade constraints in states with COVID-19 outbreaks has been factored into several recent measures of economic activity. The number of small businesses opened at the end of July was about unchanged from the start of the month, according to Homebase, which makes planning software. And fewer employees were working slightly fewer hours.
A spending tracker for Chase credit and debit cardholders showed only a slight increase in spending between June and July, according to JPMorgan Chase.
And the private payroll processor ADP reported 167,000 private sector job gains in July, well below the 1.2 million predicted by economists.