Hopes for US economy get a boost from latest jobs data
EMPLOYMENT REMAINS ABOUT 13 MILLION BELOW PRE-PANDEMIC LEVELS
The US labour market continued to regain ground in July, though at a slower pace, indicating the economic rebound is still making headway despite a surge in coronavirus infections.
Payrolls increased by 1.76 million in July, beating estimates for a 1.48 million gain and after a 4.79 million advance in June, according to data yesterday from the Labour Department. The unemployment rate fell by more than expected, to 10.2 per cent, while a broader gauge of joblessness also declined to 16.5 per cent.
The data point to a labour market that’s on the mend as the economy crawls its way back from the depths of a virus-induced recession.
At the same time, the jobless rate remains high and the path forward will be uneven, with higher-frequency indicators turning more negative as businesses use up the last of their federal loans and reduced unemployment benefits pressure consumer spending.
“There is some moderation in the pace of job creation, naturally, as you get past the initial bounce in activity upon reopening,” said Michelle Meyer, head of US economics at Bank of America Corp. “It’s still a long road ahead in terms of fully recovering the labour market, but progress is being made.” US equities dipped amid growing speculation that lawmakers won’t be able to agree on a new round of economic stimulus.
Reopening of hospitality
Employment remains about 13 million below the pre-pandemic level in February, when the recession officially started, the July data show.
Adjusted for the misclassification of unemployed Americans as employed the jobless rate would have been about 1 percentage point higher, the
Labour Department said.
The increase in employment reflected further reopening effects on the leisure and hospitality industry, where payrolls at restaurants jumped by a half million. Retail trade employment also increased, though at a slower pace, with more than 250,000 jobs added. Health care and social assistance payrolls rebounded as doctors’ offices continued to open and as demand for day care increased.
At the same time, manufacturing employment rose just 26,000 in July, well below forecasts.