The U.S. labor market continued to regain ground in July, though at a slower pace, indicating the economic rebound is still making headway despite a surge in coronavirus infections.
Payrolls increased by 1.76 million in July, beating estimates for a 1.48 million gain and after a 4.79 million advance in June, according to data Friday from the Labor Department. The unemployment rate fell by more than expected, to 10.2%, while a broader gauge of joblessness also declined to 16.5%.
The data point to a labor market that’s on the mend as the economy crawls its way back from the depths of a virus-induced recession. At the same time, the jobless rate remains high and the path forward will be uneven, with higher-frequency indicators turning more negative as businesses use up the last of their federal loans and reduced unemployment benefits pressure consumer spending.
Treasuries slipped briefly after the jobs report, while the dollar pared its gains and U.S. stock futures clawed back some of their earlier decline.
With lawmakers and administration officials struggling to agree on a new relief package, President Donald Trump said on Thursday he’s likely to sign an order Friday or over the weekend extending the enhanced unemployment benefits and imposing a payroll tax holiday.
Employment remains about 13 million below the pre-pandemic level in February, when the recession officially started, the July data show.
The number of working Americans climbed for third straight month in July
Adjusted for the misclassification of unemployed Americans as employed — an issue that’s plagued the data to varying degrees since March — the jobless rate would have been about 1 percentage point higher, the Labor Department said.
The increase in employment reflected further reopening effects on the leisure and hospitality industry, where payrolls at restaurants jumped by a half-million. Retail trade employment also increased, though at a slower pace, with more than 250,000 jobs added. Health care and social assistance payrolls rebounded as doctors’ offices continued to open and as demand for day care increased.
At the same time, manufacturing employment rose just 26,000 in July, well below forecasts and held back by declines in payrolls at producers of fabricated metals, machinery and computers and electronic products. Auto makers added more than 39,000 workers.
(Article written by Katia Dmitrieva)