Numbers: The raging pace of US employment growth in late spring gave way to a sharp recession in hiring in July, underscoring the fragile nature of a recovery with coronovirus still widespread in many states.
The economy gained 1.76 million jobs last month, just a third of the revised 4.79 million gain in June.
The government unemployment rate fell from 11.1% to 10.2% in the third month, the government said on Friday.
The US stock market collapsed early Friday. The increase in new jobs was slightly above the 1.68 million marketwatch forecast.
Against the backdrop of the rise in coronovirus cases in many states, including California, Texas and Florida, there was a small increase in employment generation. Some restrictions on businesses were re-enforced and Americans showed more caution about where they went and what they did.
The slight improvement in hiring was slightly weaker than it appeared. The government’s seasonal adjustment process showed an exaggerated increase in school employment. Excluding government jobs, private sector jobs increased by 1.46 million last month.
A slowdown in hiring – hardly unexpected – will make it harder for the economy to recover quickly.
The US shed more than 22 million jobs during the height of the epidemic. So far it has only been restored to about 9.3 million, leaving more than half of Americans who lost their jobs.
What’s more, even the largest 31 million people were collecting unemployment benefits in mid-July based on the most recently available numbers. A divided Congress still has not agreed to extend the $ 600 federal unemployment bonus that expires at the end of July, another possible path to recovery.
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What happened: Restaurants and retailers added the most jobs in July, but at a slower pace than the first two months. The restaurant reunited 502,000 workers and the retail generated 258,000 jobs.
Restaurants and retailers have been at the center of the epidemic. Combined by shedding more than 8 million jobs, they faced the biggest employment decline.
They have since recaptured about half of those jobs, but progress is uncertainly expected here after the latest coronovirus outbreak to tighten restrictions on trade openings and indoor activities.
The number of people employed by the government saw an increase of 301,000, but the amount received was partly a statistical anomaly.
Many school workers, such as bus drivers and cafeteria workers who are usually hired in July, are sent home after the early closure of schools in the spring. The government implemented the usual process of seasonal adjustment, as it did not come into force in July as usual, as it was like hiring only.
The federal government also hired more census workers.
In other key sectors of the economy, health care providers boosted payroll by 126,000. The manufacturers added 26,000 jobs. And construction companies took 20,000 workers to keep pace with the increasing demand for homes.
Home builders have been a surprise beneficiary of the crisis. Mortgage interest rates have fallen to modern record lows and many are fleeing from the suburbs and overcrowded cities for more space in the country.
On the other hand, the energy sector has also been hit by an epidemic. People are reducing driving and flying by reducing the demand for oil and gas. Employment fell by 7,000.
The average hourly wage climbed slightly, bringing 7 cents to $ 29.39 per hour. So far, large-scale swings in employment have made the normally slow-changing pay data less and less useful, becoming as much of a pay as it is.
Although the official jobless rate fell again, it is quite likely that the true level of unemployment is high.
A broad measure of unemployment known as the U6 rate was the “real” rate of 16.5% in July, slightly lower than the 18% in the prior month. The U6 rate includes workers who can only find part-time jobs and who have become very frustrated in their search for jobs because so few are available.
The government slightly revised the June employment benefit to 4.79 million. The increase was pegged at 2.73 million in May.
ReadHere’s a ‘real surprise’ in the July jobs report – reaction from economists
big picture: A resurgence in coronavirus cases has gained steam in May and early June and points to a stony path to the economy. America simply cannot return to normal while coronovirus is still a major threat and millions of people cannot return to work.
The longer the health crisis lasts, economists say, the more likely it is to temporarily lose jobs and the US will take longer to recover. Some say that vaccines or other effective treatments for COVID-19 may be absent in this process.
See:Marketwatch’s coronavirus virus recovery tracker
What are they saying The economic outlook deteriorated from late July to late July as consumers became less willing to spend money, and businesses grew uncertain about the demand for their goods, ”economist John Leer said at Morning Consult. “As a result, the current employment situation is likely to be weaker than these numbers.”
Read:Consumers hold the key to an economic recovery and are still very concerned
Market reaction: Dow jones industrial average
And the S&P 500
Friday was set to open lower in trades.