By Sarah Chaney
Hiring gains are expected to have cooled in July, a sign of a
slowing economic recovery as coronavirus cases rise.
Economists surveyed by The Wall Street Journal ahead of Friday's
report from the Labor Department projected that payrolls grew by
1.5 million in July and forecast that the unemployment rate dropped
to 10.6% from 11.1% in June. Such job gains would signal the
labor-market recovery continued, though at a weaker pace than in
the previous two months. A double-digit jobless rate would still be
Before the coronavirus drove the U.S. into a deep recession this
year, the unemployment rate was at or near a 50-year low of 3.5%.
Employers added more than seven million jobs in May and June
combined, as many states lifted lockdown restrictions on
businesses. That partly offset the about 22 million jobs shed in
March and April.
"On balance, we're still in a hole," said Julia Coronado,
economist at MacroPolicy Perspectives. "The pace of recovery has
really been set back by the resurgence of the virus. Given how far
we have to go to re-employ the people who have become unemployed,
that's very discouraging."
The number of workers filing for unemployment benefits fell last
week to the lowest level since March, though remained historically
high at 1.2 million new applications. That indicates the labor
market was still healing in late July.
The economy entered a recession in February and appeared to
begin a recovery as early as April. Economists say the speed at
which businesses hire and consumers spend depends, in large part,
on the course of the virus. Many consumers remain hesitant to
resume store visits, dine out or board planes as virus cases remain
high. Some businesses face renewed government restrictions.
Jeremy Murray's patio bar in Austin, Texas, closed for 12 weeks
starting in March, then had only reopened for about a month when it
was forced to shut down for a second time in late June, as Texas
grappled with a surge in reported Covid-19 cases. The bar, called
Kitty Cohen's, was making about a third of the revenue it had in
the same month last year, Mr. Murray said, but at least the money
was enough to cover rent and other expenses.
"It was pretty deflating," said Mr. Murray, who furloughed all
eight of the staff he had brought back to work at the bar. Another
10 employees have been on furlough since the spring. "I just
remember really fighting back some serious emotions," he said.
A Federal Reserve Bank of St. Louis analysis found that states
with a larger number of coronavirus infections cases since June saw
the weakest job recoveries between early June and late July.
Arizona, Florida and Texas were among the states with the sharpest
increases in coronavirus cases and mild employment recoveries, the
A Cornell University survey separately found that 31% of
recalled workers had recently been laid off a second time, with
most of these layoffs occurring in states without large virus
New job postings are increasing in three main categories,
according to ManpowerGroup: jobs that are transforming business,
such as software developers; jobs that are moving things, such as
delivery drivers; and jobs that are helping people, such as
The labor-market recovery depends on employers' confidence and
ability to meet employees' desire to feel safe returning to work,
said Becky Frankiewicz, president of ManpowerGroup North
"It's not just about the economic conditions in the state or the
status of the virus, it's about how people feel," she said.
Desert Orthopaedic Center in Las Vegas is looking to add a
couple of physicians to its practice. The medical company had
reduced staff hours in several departments after patient visits and
surgeries fell steeply beginning in mid-March, said Chief Financial
Officer Jim Washer.
"I think a lot of it was just due to people hunkering down and
staying inside and not going anywhere," he said.
By early May, patient visits were climbing and Desert
Orthopaedic workers returned to regular 40-hour weeks. Mr. Washer
said the business rebound was likely a result of patients' need for
medical care and relative comfort coming to a doctor's office.
He fears, though, that patient numbers could drop again if the
Las Vegas economy deteriorates.
"I have an uneasy feeling that I shouldn't get too comfortable
that things are back to normal," Mr. Washer said.
The July jobs figures could influence the policy debate in
Washington on extending extra unemployment benefits for millions of
workers. A $600 a week benefit expired at the end of July.
The extra benefits helped Tracy Menasco, 51 years old, pay rent,
grocery bills and student loans during the pandemic. The Spokane,
Wash., resident was temporarily laid off from her sales job in
April, and she was then told in June that her position was
permanently eliminated. She said she hopes her savings will help
cover costs since the supplemental jobless aid ended.
"I've stashed away what money I can, and I'm just trying to
watch my budget and be careful," she said.
Ms. Menasco is among workers who thought layoffs were short term
but now see them as permanent. While most of those who lost jobs
during the pandemic say their layoffs are temporary, the number who
reported their jobs losses as permanent nearly doubled in June from
March, to almost three million, according to the Labor
Ms. Menasco has been applying for jobs since June, but she
hasn't had much luck, which she said is uncommon for her
Sales jobs are "usually the last to go or the first one in, and
it doesn't seem to be safe in this economy," she said.
--Kim Mackrael contributed to this article.
Write to Sarah Chaney at email@example.com
(END) Dow Jones Newswires
August 07, 2020 05:44 ET (09:44 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.