In July, the US economy added another 1.8 million jobs, a sharp slowdown from June, and a small step for an economy that during the pandemic is still down 12.9 million jobs. After the spring lockdown, it was the third straight month of improvement that decimated the labour market. Last month, however, the economy added far less than the 4.8 million jobs America added in June.
The unemployment rate dropped to 10.2 per cent, announced Friday by the Bureau of Labor Statistics, but remains above the 10 per cent high Great Recession hit in October 2009. The State has failed to quantify a large amount of people out of work since the pandemic struck. That’s partial because it was becoming increasingly difficult for the staff themselves to determine whether they were temporarily laid off or working but not at work.
In June and July the proportion of misclassified responses was smaller than in the months before, the BLS said. The July unemployment rate, including the misclassified jobs, would have been approximately one percentage point higher than recorded. The reopening of the economy and a revival in some states of COVID-19 infections combined with companies and individuals running out of federal assistance has created a complex set of conditions for the job market.
Cornell University Study
A Cornell University study found that 31 per cent of employees newly rehired lost their jobs during the pandemic for a second time. About 26 per cent were told they could be laid off again. Meanwhile, St. Louis’ Federal Reserve Bank has said states with more cases of COVID since June have reported the weakest recovery in jobs. This happened most prominently to Arizona, Florida and Texas.
In Washington, Friday’s job report comes during tense times. It is as Republicans and Democrats are butting heads over the next stimulus bill. One point of contention is the enhancement of unemployment insurance by the government. The CARES Act provided an $836 (the US $600) weekly boost to regular jobless assistance. But on July 31 this provision did run out.
Currently, Congress is fighting over whether to proceed. Democrats want to retain the $836 (US$ 600) weekly payment for the remainder of the year. It is while Republicans want to cut it down to $557 (US$ 400) a week. Many analysts claim that too much unemployment assistance potentially keeps people from returning to work. The problem is what is an abundance of assistance during an ongoing economic crisis.