By Sarah Chaney
Hiring increased in July for the third straight month, though
overall gains have yet to restore half of the U.S. jobs lost due to
the coronavirus pandemic.
July's addition of 1.8 million jobs and a lower unemployment
rate of 10.2%, after a peak of nearly 15% in April, showed the U.S.
economy continued to mend during the summer coronavirus surge. It
also reflected how far the economy has to go to overcome the shock
from the pandemic and related lockdowns.
The U.S. now has about 13 million fewer jobs than in February,
the month before the coronavirus hit the U.S. economy, the Labor
Department said on Friday. Unemployment remains historically high.
Before the coronavirus drove the U.S. into a deep recession this
year, the unemployment rate was hovering around a 50-year low of
"We're in a pretty strong rebound," said David Berson,
Nationwide Mutual Insurance Co. chief economist. "But the downturn
was so big -- the hole that was dug was so deep -- that it will
still take probably at least a couple of years to dig ourselves
U.S. stocks slipped on Friday after July's employment figures
were released and as policy makers in Washington remained
deadlocked on how to provide additional economic stimulus,
including extra aid to laid-off workers.
The greatest employment growth occurred last month in the
hospitality, government, retail, business-services and the
health-care sectors. Broad-based job growth, combined with last
week's decline in unemployment claims, belied some economists'
fears that a rise in coronavirus cases this summer would trigger a
reversal in the economic recovery.
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.
Labor-market gains have been uneven. Jobless rates for white,
Asian and Hispanic workers declined in July, while holding steady
for Black workers.
The number of individuals saying they are unemployed due to
temporary layoffs continued to fall, a sign that workers being
recalled to old jobs was driving recent hiring. The number
unemployed due to permanent layoffs held steady, suggesting few new
jobs are being created. The number of people unemployed for an
extended period -- 15 to 26 weeks -- jumped by 4.6 million to 6.5
million workers, showing it will take time for the labor market to
Service-sector jobs, including in leisure and hospitality and
retail, accounted for the bulk of July's job growth. Such jobs were
hit particularly hard by social-distancing measures and had the
most ground to gain. Goods-providing jobs, which include mining,
manufacturing and construction, either declined or hardly grew last
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 the
state grappled with a surge in reported Covid-19 cases. The bar,
called Kitty Cohen's, was making about one-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 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 report
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
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.
Eric Lanser, age 34, of Boston, has seen job prospects improve
since he was furloughed from a small investment-banking firm in
At the onset of the pandemic, he reached out to several firms
but none was hiring because activity in mergers and acquisitions
had dried up, he said. Mr. Lanser said demand for
investment-banking services appears to be increasing now, and as a
result, he has more job leads.
"I'm feeling much more optimistic," Mr. Lanser said.
Friday's Labor Department report said fewer individuals were
misclassified as employed instead of unemployed on temporary
layoff, creating no more than a 1-percentage-point understatement
of the unemployment rate. This is a change from earlier in the
pandemic, when the error understated overall unemployment by
several percentage points.
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.
--Kim Mackrael contributed to this article.
Write to Sarah Chaney at email@example.com
(END) Dow Jones Newswires
August 07, 2020 14:55 ET (18:55 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.