The US economy added 1.8 million jobs in July, marking the third consecutive month of employment growth as the country recovers from the coronavirus pandemic that has caused widespread disruption. However, job growth slowed since June amid concerns over the resurgence of COVID-19 infection in some states. In June, nonfarm payrolls had increased by 4.8 million, which was revised down.
The headline unemployment rate dropped to 10.2% from 11.1% in June. The numbers also beat economists’ projection. There were 16.3 million unemployed persons at the end of the month, down by 1.4 million from the June figure. Still, the labor market conditions remain weak compared to the pre-crisis levels.
The number of those who have been temporarily laid off nearly halved to 9.2 million since April. Meanwhile, the labor force participation rate remained broadly unchanged at 61.4%, after rising in the preceding two months.
The improvement reflects the resumption of economic activity after being hit by the virus. According to the Bureau of Labor Statistics, the sectors that witnessed strong job recovery include hospitality, retail, healthcare, business services, and government.
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The business world is closely monitoring economic data that come out these days, considering the impasse over passing the much-awaited second stimulus package. Also, there is a growing demand to reinstate the government program on the additional aid of $600 to households affected by the shutdown. The scheme had expired last week.
On Thursday, data released by the Bureau of Labor Statistics showed that the number of jobless claims declined to 1.2 million in the week ended August 1, which was better than the outcome experts had predicted. Also, the four-week moving average of jobless claims eased to $1.4 million.
The encouraging claims report, which came after two consecutive weeks of increases, was the best weekly data on the labor market since the COVID outbreak. However, the number of persons availing Pandemic Unemployment Assistance remained high last week.
The pandemic’s crippling effects on the economy have thrown markets into disarray, leaving thousands of people unemployed since its outbreak a few months ago. The unprecedented downturn has raised concerns that the economy is headed for a recession.