Forecasters expect the Labor Department to report that about 1.6 million jobs were added to payrolls in July and that the unemployment rate dropped to 10.6% from June’s 11.1%.
Before the pandemic, 1.6 million new jobs in a month would have been a record. Given the cataclysmic job separations of the spring, however, it would suggest that the recovery has fallen off the pace needed to return the labor market back to normal and avoid a deep and lasting recession. In comparison, 5 million jobs were created in May and June.
It’s also possible that job creation has stalled out. Payroll processor ADP reported on Wednesday that just 167,000 jobs were created in July. The company reported that more than 7 million jobs were created in May and June.
One issue hindering the recovery is the spike in coronavirus infections in several states. The country has more than 4 million cases, with over 1,200 new coronavirus deaths, and 53,726 new cases were reported in the United States on Wednesday. Several states have either rolled back or paused reopening their economies to help stem the increase of infections.
Another sign that the jobs market is slowing are the number of workers filing for weekly jobless benefits.
The number of new applications for unemployment benefits last week was 1.2 million, the Labor Department reported Thursday, marking the 20th straight week that claims have been more than 1 million. In other words, businesses are still laying off workers at historic rates.
The weekly totals for workers claiming jobless benefits have been extremely high since the pandemic hit the U.S. For comparison, weekly jobless claims pre-coronavirus were in the 200,000 range for the entire country. Now, California alone had over 244,000 initial claims for the week ending July 25.
After jobless claims skyrocketed in March, with 6.9 million filing for benefits for the week ending March 28, the number of workers claiming unemployment benefits dropped precipitously through the end of May.
Since then, new jobless claims have hovered above 1 million, and ticked up in the prior two weeks. Jobless claims for the week ending July 18 were 1.434 million, and claims for the week prior were 1.422 million.
