Economists were split in their estimations of July’s jobs change, with experts anticipating the change could range anywhere from a loss of 600,000 jobs to a gain of 3.2 million. Although the Bureau of Labor Statistics found that hiring slowed somewhat with a 1.8 million jobs gain in July, our total jobs gain in the past three months have now reached 9.3 million, even as the West and the South were suffering from coronavirus outbreaks.
In short, just months after the Congressional Budget Office predicted that unemployment would remain in the double digits through 2021, our unemployment rate fell to 10.2%.
The July jobs report should stave off fears of a return to a recession, for now at least.
BLS’s inability to tally seasonal adjustments in employment perfectly, given the precarious state of schools right now, means that the jobs gain estimation may be slightly inflated. Non-seasonally adjusted employment still rose by more than half a million jobs, however, and wages rose by 0.2%, even though economists had anticipated a slight wage loss. Further, employment gains from May and June collectively were slightly revised upward by 17,000 jobs.
This is good news — it is far from great news. Although jobs in the food and beverage industry increased by another half a million in July, the industry’s jobs are still down by a staggering 2.6 million from before the plague. The story is roughly the same, though less pronounced, across industries. Healthcare saw 126,000 jobs added in July, though the industry is still down nearly 800,000 jobs from February, and in retail, even more than a quarter-million jobs added leaves the industry down nearly a million jobs from February.
Just in time for a deceleration of our recovery, key provisions of the CARES Act are expiring. The economy has miraculously returned to the cusp of single-digit unemployment. Experts predict that recent coronavirus surges in the West and South mark peaks, not points of inflection, so the simplest interpretation is that consumer demand is fueling an economy that wants to return to business.
Both for the fundamentals of the economy and for President Trump’s reelection odds, the jobs report simply renews the pressure on Republicans to get a second coronavirus crisis deal done immediately.
We’re not in recession territory. So long as consumer demand and effective safety measures continue to float cash flows, this deceleration will not reverse into a decline. But as Friday morning’s market rebound would suggest, investors anticipate that will come with federal assistance, spurred by the BLS’s insistence that school insecurity will continue to throw the economy into limbo.
