US adds 1.8 million jobs in a sign that hiring has weakened

US adds 1.8 million jobs in a sign that hiring has weakened

Sunday, August 09, 2020

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WASHINGTON (AP) — 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 is weakening 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 per cent of the jobs lost to the pandemic-induced recession, according to the labour department's jobs report released on Friday, August 7.

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 per cent to 10.2 per cent, that level still exceeds the highest rate during the 2008-2009 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 labour market crisis is worse than the Great Recession...Until the virus is under control, a full and sustained recovery will remain out of reach.”

The report suggests that high unemployment and shrivelled incomes for many households will remain an issue through the November elections and a potential threat to President Donald Trump's re-election prospects. Congressional Democrats are pushing for more government stimulus, including an extension of a now-expired US$600 weekly federal unemployment benefit. Senate Republicans are seeking to reduce that unemployment payment in any extension. The White House also opposes further aid for state and local governments, another key Democratic demand.

The acceleration of the viral outbreak that began in late June more than doubled the daily US confirmed case count by mid-July. The rate of new reported cases has since declined. But the outbreaks have led many states and cities to close bars and other businesses for a second time and have dampened confidence, causing many consumers to limit their shopping, travelling, eating out and gathering in crowds.

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 its June gain. Restaurants, bars, hotels and entertainment venues gained 592,000, just one-quarter of their June increase.

Retailers added 258,000 jobs, down from more than 800,000 in June.


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