By Sarah Chaney
Hiring likely eased in August from a faster pace earlier this
summer, a sign the U.S. economy is settling in for a slow recovery
after the coronavirus pandemic struck.
Economists expect employers added about 1.3 million jobs in
August, a solid monthly payroll gain but the smallest in four
months. State reopenings helped boost employment by a combined 7.5
million payrolls in May and June before hiring growth slowed in
July.
Economists forecast the unemployment rate fell to 9.8% last
month, dropping below 10% for the first time since March as
employees headed back to work. Still, joblessness remains
historically high. The unemployment rate was 3.5% in February, a
half-century low, just ahead of the pandemic.
In July, the U.S. had about 13 million fewer jobs than in
February, the month before the new coronavirus hit the economy.
"We are in the hole by millions, and the longer we stay in that
hole, the more people will suffer," said Martha Gimbel, economist
at Schmidt Futures, a philanthropic initiative.
The recovery has occurred in fits and starts. The number of
small-business employees working rose swiftly from April through
June but has since stagnated and was about 77% of January levels at
the end of August, according to Homebase, a scheduling-software
company.
The numbers of workers seeking and receiving unemployment claims
also remains elevated at historically high levels, though both fell
in late August, the Labor Department said Thursday. The totals
represent a mixed picture for the labor market -- and one where
about 29 million people were receiving state or federal
unemployment assistance in the middle of last month.
Some companies that reopened in late spring and early summer
hired back a portion of their furloughed workers but aren't seeing
enough demand to bring employment back to precrisis levels.
Faust Hotel and Brewing Co. laid off all employees except for
managers when it temporarily closed at the onset of the pandemic.
The New Braunfels, Texas, company slowly brought back workers for
its reopening at the end of spring, said McKenna Lewis, the hotel's
guest-services coordinator.
Faust is still operating with less staffing than before the
economic crisis hit earlier this year, and Ms. Lewis doesn't expect
it to ramp up hiring. Hotel reservations were hurt by a decline in
tourist traffic this summer. Business likely won't pick up soon,
especially now that Wurstfest is canceled, Ms. Lewis said, noting
the German-sausage and drinking festival boosted New Braunfels's
fall tourism in pre-pandemic times.
"Ultimately we're just trying to remain hopeful that people want
to see us survive," she said.
Sectors that were among the hardest hit at the start of the
coronavirus crisis have been some of the quickest to recover jobs.
The greatest employment growth occurred in July in industries
including hospitality, retail and health care.
BluePearl Pet Hospital, a network of veterinary medicine
hospitals across the country, is in hiring mode, thanks to a sharp
rise in demand for vet services, said Jimmy Barr, the company's
chief medical officer. He attributes the increase in vet visits, in
part, to a rise in pet ownership during the pandemic.
Individuals working from home are spending more time with their
pets during quarantine and have more flexibility to seek care, Mr.
Barr said.
Still, many businesses must operate under government-mandated
capacity restrictions and consumers remain cautious about venturing
out, reducing employers' need for new workers.
Several large companies have warned of job cuts. United Airlines
Holdings Inc. said Wednesday it plans to cut 16,370 staff amid a
pandemic-driven slump in passenger demand. Coca-Cola Co. said last
week it plans to lay off some employees and offer voluntary buyouts
to about 4,000 employees in the U.S. including Puerto Rico, as well
as Canada.
Economists say new company layoffs reflect a shift in employers'
mentality from earlier in the crisis, when many expected shutdowns
would be over in a matter of weeks.
"People really thought that it was, 'We're just going to shut
down for a few weeks and we'll be back,' " Ms. Gimbel said. "If you
are laying people off now, you kind of know that this situation
isn't going anywhere any time soon. It is highly likely that any
layoffs that are happening now are intended as permanent."
Just over one-third of employers expected hiring to return to
pre-pandemic levels within a year, down from 66% of employers in
April, according to a survey from staffing firm ManpowerGroup.
Shelby Burnette, age 19, recently landed a job as a part-time
teaching assistant at a day-care center after months of
joblessness.
The Newport News, Va., resident was laid off from her part-time
job at a clothing store this spring. She held off on immediately
applying for jobs because she didn't feel safe returning to work
given that a pre-existing lung condition put her at higher risk
from the effects of the virus.
Ms. Burnette said she began filling out job applications online
in June because she wouldn't be able to financially sustain herself
once the extra $600 a week in unemployment benefits expired at the
end of July. Job prospects were slim, though.
"When I would apply, I wouldn't hear anything back or sometimes
there wasn't anything to apply to. It was kind of like, 'What am I
supposed to do?' " Ms. Burnette said.
About a month ago she was hired to help supervise children at a
local day-care center. She said she hopes to find another job with
a higher wage soon, though.
Write to Sarah Chaney at sarah.chaney@wsj.com
(END) Dow Jones Newswires
September 04, 2020 05:44 ET (09:44 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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