Payrolls increase 1.8 million in July
A slow economic recovery may be underway in the United States as the Bureau of Labor Statistics reported non-farm payrolls increased by nearly 1.8 million in July, sending the unemployment rate down to 10.2%, which was better than expected.
The consensus was for growth of 1.48 million and an unemployment rate of 10.6%.
However, there were wide variations around the estimates as the pandemic’s resurgence dented plans to get the shuttered U.S. economy back online. Forecasts ranged from a decline of half a million jobs to a rise of 3 million. May and June saw a combined increase of more than 7.5 million, the fastest two-month rise in U.S. history.
Even with a three-month gain of 9.3 million workers either newly hired or back to their jobs, the total employment level remained 12.9 million below its February level. The May and June counts were revised up by a total 17,000.
An alternative measure that includes discouraged workers and the underemployed holding part-time jobs for economic reasons fell from 18% to 16.5%.
“The numbers may be good relative to expectations, but you’re still looking at an unemployment rate over 10% and labor force participation slipping a little bit,” said Kathy Jones, head of fixed income at Charles Schwab. “It’s still a pretty weak economy.”
Though bars and restaurants have struggled to cope with restrictions brought on by the pandemic, leisure and hospitality led the month with a growth of 592,000 jobs, with 502,000 of those coming in eating and drinking establishments.
Government jobs increased by 301,000 while retail added 258,000. Other gains came from professional and business services (170,000), other services (149,000) and health care (126,000).