National Job Growth Continues, But at Slower Pace

Article Source: The Statehouse News Service
Article Author: Chris Lisinski

AUG. 7, 2020…..American employers added nearly 1.8 million jobs in July while the unemployment rate declined to 10.2 percent, restoring another chunk of the jobs lost during the pandemic but at a slower pace than in recent months.

The 1.76 million positions added are more than three times the gains as any pre-pandemic month since 2000, but the boost also lags behind the 2.7 million jobs added in May and the 4.8 million added in June, according to federal datapublished Friday.

Altogether, the three continuous months of rising employment have clawed back less than half of the historic 21.3 million jobs cut in April, when many businesses were ordered to close physical operations to slow the spread of COVID-19.

“The economy fell off a cliff at the end of the first quarter of 2020 and we have been slowly climbing back ever since, thanks in large part to government support,” Citizens Bank Head of Global Markets Tony Bedikian said in a statement. “We have seen a very troubling increase in COVID-19 cases in many states that had reopened for business, but we continue to be cautiously optimistic that the overall U.S. economy has turned a corner, and that the solid job gains announced today will be sustained.”

Job gains came in most industries tracked by the Bureau of Labor Statistics, with leisure and hospitality and food services and drinking places — two of the categories most sharply affected by mandatory shutdowns — together accounting for nearly 1.1 million of the new positions.

Retail trade added another 258,000 jobs in July, while health care employment increased 126,000.

Total jobs in the public sector rose by 301,000 in July, federal officials said, countering a traditional trend of declining in July before seasonal adjustment is applied.

“Employment declines occurred earlier than usual this year due to the pandemic, resulting in unusually large July increases in local government education (+215,000) and state government education (+30,000) after seasonal adjustment,” BLS wrote in its report. “A July job gain in federal government (+27,000) reflected the hiring of temporary workers for the 2020 Census.”

Economists have warned that major cuts to government services could be on the horizon if Congress and President Donald Trump do not agree on an aid package that will help close massive state and local budget gaps opened by the pandemic. Negotiations in Washington are ongoing, with no compromise appearing imminent Friday morning.

Officials also announced that the national unemployment rate — determined through a different survey than total employment — declined to 10.2 percent in July, a 0.9 percentage point drop from June.

That, too, reflects the volatility of the current economic reality. Dropping almost a full percentage point from the unemployment rate — particularly after hitting a high of 14.7 percent in April — is itself an almost unprecedented improvement, but the pace is again slower than in May or June.

Even after declining, the July national unemployment rate was still at a level not observed since April 1983.

BLS said in its release that the share of responses that had been misclassified was significantly lower in June and July than earlier months during the pandemic, when the surveys were hampered by the pandemic’s impact.

“For March through June, BLS published an estimate of what the unemployment rate would have been had misclassified workers been included,” the bureau wrote. “Repeating this same approach, the overall July unemployment rate would have been about 1 percentage point higher than reported. However, this represents the upper bound of our estimate of misclassification and probably overstates the size of the misclassification error.”

Many states in recent months have eased the initial restrictions they placed on business and public activity earlier in the pandemic, though surging case numbers have prompted several governors to pump the brakes on their reopening plans, which could create an uneven recovery process.

Officials will publish July employment numbers and unemployment rates for all 50 states on Aug. 21. In June, Massachusetts had the highest unemployment rate in the nation at 17.4 percent, even though the state’s businesses added a record 83,700 jobs.