Hiring slows amid economic worries

Pandemic’s harmful effects could last longer than once believed

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% 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% to 10.2%, that level still exceeds the highest rate during the 2008-09 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 many of the unemployed 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.”

The jobs report emerged as new infections run at about 55,000 a day. While that’s down from a peak of well over 70,000 a day in the second half of July, cases are rising in about half of the states, and deaths are climbing in many of them.

In other virus-related developments Friday:

▪ California has surpassed 10,000 deaths from the coronavirus, making it the U.S. state with the third-highest number of deaths since the beginning of the pandemic. The figure was reported Friday by Johns Hopkins University.

▪ Russia boasted that it’s about to become the first country to approve a COVID-19 vaccine, with mass vaccinations planned as early as October using shots that are yet to complete clinical trials. Scientists worldwide say the rush could backfire if the vaccine is neither effective nor safe.

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.