Work cut out for US labour

Economists polled by Reuters had forecast 1.6 million jobs were added in July. Many say July was probably the last month of employment gains related to the rehiring of workers after the reopening of businesses.

Last month’s slowdown in job growth occurred across all sectors, with the exception of government. The leisure and hospitality industry hired 592,000 workers, accounting for about a third of nonfarm payrolls. The bulk of the jobs were at restaurants and bars. Retail employment rose by 258,000 jobs, with almost half of the gain in clothing and accessories stores.

Professional and business services added 170,000 jobs, concentrated in the temporary help services. Government employment increased by 301,000 in July, artificially boosted by hefty gains in state and local government education.

Millions unemployed

The unemployment rate fell to 10.2 per cent from 11.1 per cent in June, but it has been biased downward by people misclassifying themselves as being “employed but absent from work”.

bureau of Labour Statistics estimated that the jobless rate would have been 11.2 per cent without this error. The bLS, however, cautioned that the one percentage point estimate “represents the upper bound of our estimate of misclassification and probably overstates the size of the misclassification error”.

at least 31.3 million people were receiving unemployment checks in mid-July. The slowdown in hiring challenges the uS stock market’s expectation of a V-shaped recovery.

“The steam has gone out of the engine and the economy is beginning to slow,” said Sung Won Sohn, a finance and economics professor at Loyola Marymount university in Los angeles. “The loss of momentum will continue and my concern is that the combination of the virus resurgence and lack of action by Congress could really push employment into negative territory.” — Reuters