According to LinkedIn’s U.S. Emerging Jobs Report.
The U.S. added 1.8 million jobs in July as payroll growth slowed amid a split-screen economy that had employers stepping up hiring in parts of the country that continued to let businesses reopen, even as COVID-19 spikes forced Sunbelt firms to pull back and lay off workers.
The unemployment rate fell to 10.2% from 11.1% in June, the Labor Department said Friday.
Economists surveyed by Bloomberg had estimated that 1.5 million jobs were added last month.
Starting in late June, nearly half the states paused or reversed reopenings because of surges in coronavirus cases, a rollback that particularly hit Texas, Arizona, Florida and California. Those losses were likely more than offset by net job gains elsewhere in the country as states relaxed restrictions, Goldman Sachs said in a research note.
But forecasting employment in July was a crap shoot, with some economists expecting upwards of two million gains and others anticipating losses.
The number of Americans on temporary layoff fell by 4.8 million to 10.5 million as many laid-off workers at restaurants, malls, gyms and other outlets were called back amid state reopenings. About 60% of unemployed workers were on temporary layoff. At the same time, 2.9 million people had permanently lost jobs in July, up from 2.3 million the prior month, in a sign more employers are cutting ties with workers in the face of reduced sales or a highly uncertain outlook.
Besides the reopenings, job gains in the spring were juiced by forgivable federal loans to small businesses as long as they retained or rehired employees. About a third of the 22 million U.S. jobs shed in the early days of the pandemic were recouped in May and June.
But clawing back the rest of the payroll losses is likely to be a tougher slog as employers grapple with infection outbreaks and depleted cash. Many businesses have exhausted their federal loans, forcing some struggling firms to lay off workers a second time. Morgan Stanley foresees a “significant risk” of job losses in August.
Meanwhile, unemployed workers are coping with the expiration of a $600 federal supplement to state unemployment benefits. Congress is debating whether to renew both the small business loans and at least a portion of the jobless benefits as part of a new stimulus bill but lawmakers have been deadlocked over the measure.
Barb Brown, 66, of Quartzsite, Arizona, was laid off from her job as a corporate travel agent in March. Her boss told her she’ll eventually be called back but with the crisis battering business travel more harshly than perhaps any other sector, she has no idea when.
She and her husband have been relying on her roughly $900 in unemployment benefits, along with small Social Security and disability payments, to pay their monthly bills and make repairs on their two motor homes, one of which they plan to sell. Now, the jobless benefits have been slashed to about $300.
“Now things will really become tough,” she says. “It’s been very, very, very stressful.”
The reinstatement of business constraints in states with COVID-19 surges has been captured in several recent measures of economic activity. The number of open small businesses at the end of July was roughly unchanged compared with the beginning of the month, according to Homebase, which makes scheduling software. And fewer employees were working slightly fewer hours.
A tracker of spending by Chase credit and debit card holders showed just a small increase in outlays between June and July, according to JPMorgan Chase.
And private payroll processor ADP reported 167,000 private-sector job gains in July, well below the 1.2 million forecast by economists.
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