US payrolls add 1.8 million jobs; jobless rate drops to 10.2%
Friday, August 07, 2020
Employers added 1.8 million nonfarm new hires in July, down from 4.8 million jobs created in June, according to the federal Bureau of Labor Statistics. July’s rate of unemployment dropped to 10.2% from June’s 11.1%. July’s numbers indicate the reopening of commerce closed to slow the spread of the coronavirus pandemic.
The number of unemployed workers declined to 16.3 million in July from June’s 17.7 million. Most major worker groups saw their unemployment rates fall. Black workers’ jobless rate changed little from June to July.
The number of unemployed workers on temporary layoff dropped to 9.2 million compared with 10.5 million in June, according to the BLS. For the jobless, returning to the labor force proved a continuing challenge.
“Among the unemployed, those who were jobless less than 5 weeks increased by 364,000 to 3.2 million in July,” according to the BLS, “and the number of persons jobless 15 to 26 weeks rose by 4.6 million to 6.5 million.”
Workers’ hourly pay increases fluctuated in July. “Average hourly earnings for all employees on private nonfarm payrolls rose by 7 cents to $29.39, following large changes in recent months,” the BLS reported. “Average hourly earnings of private-sector production and nonsupervisory employees decreased by 11 cents to $24.63 in July.”
Large companies of 500 workers and up added 129,000 new employees in July versus 873,000 workers in June, according to ADP/Moody’s monthly employment report for nonfarm private-sector payrolls only. Small firms of 1-49 workers created 63,000 jobs in July after 937,000 new hires in June. Midsize firms of 50-499 workers shed 25,000 jobs in July after hiring 559,000 new workers in June.
Goods-making firms added 1,000 new hires in July compared with 457,000 new workers in June. In the economy’s dominant service sector, employers hired 166,000 employees in July versus June’s 1.9 million total. Leisure and hospitality firms added 38,000 jobs in July after hiring 961,000 workers in June.
“The labor market recovery slowed in the month of July,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, in a statement.
The second-quarter gross domestic product fell 32.9%, an unprecedented drop in economic growth. Meanwhile, the $600 weekly pandemic jobless benefit to standard unemployment insurance (UI) benefits have ended.
Currently, workers filing for UI will not receive that extra $600. This decrease will depress consumer demand for the goods and services that private firms provide.
Meanwhile, coronavirus relief talks between Democrats and Republicans slog on in Congress. At the same time, states and local municipal budgets are facing tax revenue shortfalls from commerce closures during the coronavirus shelter-in-place orders.
Public services and jobs for tens of millions of people across the U.S. are at-risk from such budget cuts. A way to avoid that scenario, which would trigger a consumer demand-shock to businesses and the customers they serve, is to use the tool of monetary policy.
The Federal Reserve Bank’s Municipal Liquidity Facility will lend up to $500 billion to struggling states and local governments. “The Federal Reserve established the Municipal Liquidity Facility to help state and local governments better manage cash flow pressures in order to continue to serve households and businesses in their communities.”
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