Resurgent coronavirus weakens hiring in U.S.
Expert: Current labor market crisis is worse than Great Recession.
The United States added 1.8 million jobs in July, a pullback from the gains of May and June and evidence that the resurgent coronavirus has weakened hiring and the economic rebound.
At any other time, hiring at that level would be seen as a blowout gain. But after employers shed a staggering 22 million jobs in March and April, much larger increases are needed to heal the job market. The hiring of the past three months has recovered only 42% of the jobs lost to the pandemic-induced recession, according to the Labor Department’s jobs report released Friday.
And now, with much of the nation having paused or reversed plans to restore economic activity, many employers are still reluctant or unable to hire and consumers remain generally hesitant to shop, travel or eat out. Until the health crisis is solved through a vaccine or an effective treatment, most experts say the economy will struggle to sustain any recovery.
Though the unemployment rate fell last month from 11.1% to 10.2%, that level still exceeds the highest rate during the 20082009 Great Recession.
“The progress is encouraging, but let’s not lose sight of where we currently are,” said Nick Bunker, economic research director at the jobs website Indeed. “By both the unemployment rate and the cumulative hit to employment, the current labor market crisis is worse than the Great Recession.”
Much evidence suggests that the pandemic’s damage to the economy will take longer to mend than was envisioned in the spring. Back then, the widespread hope was that temporarily shutting down the economy would defeat the virus, after which businesses could quickly reopen and call back their laid-off workers.
Those recalls are still happening, and they accounted for the bulk of July’s job gain. But the resurgence of the virus in much of the country has reversed some reopenings and likely made it harder for many people to get back to work. Nearly half the unemployed have been jobless for 15 weeks or more, up from just one-tenth in May. And the number of Americans who say their job losses are permanent was flat last month despite the hiring gain.
The proportion of Americans who are either working or looking for work also slipped to 61.4%, down 2 percentage points from February. That signals that the job gains of the past few months haven’t encouraged many people to start seeking work.
Friday’s report suggested, too, that high unemployment and shriveled incomes for many households will remain an issue through the November elections and a potential threat to President Donald Trump’s re-election prospects.
July’s job gain was much lower than June’s 4.8 million and May’s 2.7 million. Hiring weakened last month in a range of industries. Manufacturing added just 26,000 jobs, less than one-tenth of its June gain. And some industries not directly affected by the pandemic, such as banking, cut jobs.