Jobs report hints at stall in economic rebound
Deceleration in hiring a worrisome indicator
WASHINGTON — U.S. hiring slowed in July as the coronavirus outbreak worsened, and the government’s jobs report offered signs Friday that the economic damage from the pandemic could last far longer than many observers originally envisioned.
The United States added 1.8 million jobs in July, a pullback from the previous two months. 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 42 percent of the jobs lost to the pandemic-induced recession, according to the Labor Department’s report.
Though the unemployment rate fell last month from 11.1 percent to 10.2 percent, that level still exceeds the highest rate during the 20082009 Great Recession.
Roughly half the job gains were in the industries hit hardest by the virus: restaurants, retail shops, bars, hotels and entertainment venues such as casinos. Those jobs have been relatively quick to return after
the broadest shutdowns ended in May and June.
But economists worry that the next leg of job growth will be harder to achieve, particularly as the virus dampens confidence, leaving much of the country only partially reopened, most travel on hold and millions of employees working from home.
The number of people unemployed for longer than 15 weeks jumped in July to more than 6 million, a sign that many of the unem
ployed will have to find work at new companies or even in new occupations, a potentially lengthy process.
Constance Hunter, chief economist at accounting firm KPMG, noted that many jobs in hotels, sports stadiums and the travel industry probably will not return until a vaccine is developed.
“When are you going to be comfortable again being in an air-conditioned room with 400 people?” she asked. “There are whole parts of the economy that will remain unemployed until we have a much tighter control of this virus.”
Back in the spring, the widespread hope was that temporarily shutting down the economy would defeat the virus, after which businesses could quickly reopen and call back laid-off workers. But the resurgence of the virus in much of the country has reversed some reopenings and made it harder for many people to get back to work.
In addition to the rising number of longer-term unemployed, the proportion of Americans who are either working or looking for work slipped last month to 61.4 percent, down 2 percentage points from February. That suggests that many out of work see little prospect of finding a job.
Friday’s report suggested 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.
Trump quickly celebrated the report with a pair of tweets, including one that read “Great Jobs Numbers!” But aides are nervous that the recovery is still fragile.
His Democratic opponent, Joe Biden, was quick to blame Trump for the potentially faltering recovery.
“It did not have to be this bad. We are in a deeper economic hole than we should be because of Donald Trump’s historic failure to respond to the pandemic,” Biden said.