The unemployment rate declined from 11.1% in June to 10.2% in July as the economy created almost 1.8 million jobs last month, significantly exceeding consensus estimates. Stock futures and the dollar won on the news.
This is a third consecutive month of solid hiring and a falling unemployment rate after hitting 14.7% in April, the highest level since 1940.
This suggests an economy that has continued to recover since states began to ease lockdowns. The unemployment rate of 10.2% is still weak, but is far above the Bloomberg consensus estimate of 10.6% of economists. The improvement will be good news for the White House, but it is clear that it will take years for the US labor market to return to pre-pandemic levels.
The United States Department of Labor Statistics (BLS) job report found that the total number of unemployed Americans was 16.3 million in July, which is a significant improvement from 23.1 million unemployed in April. But the number of unemployed Americans is still about three times as high as in February (when 5.8 million were unemployed) and shows that the hoped-for V-shape recovery is anything but likely.
Unemployed Americans received additional unemployment benefits of $ 600 a week from the federal government. However, this benefit expired without replacement in the week ending July 25.
Congress has not yet reached agreement on extending or replacing the $ 600 surcharge that paid its final benefits for the week to July 25. Democratic and Republican party leaders are making little progress in their talks about another stimulus package and increased unemployment. Benefits are one of the most controversial issues on the bill. Democrats want the $ 600 benefit to be extended until the end of the year, while Republicans want it to be cut back, arguing that it is so generous that it prevents the unemployed from looking for work.
Employment figures in July also show that the economic slump is still affecting some municipalities more than others. The unemployment rate among white workers is 9.2% compared to 12% for Asian workers, 12.9% for Hispanic workers and 14.6% for black workers. The rate is 9.4% for adult men and 10.5% for adult women.
While the number of unemployed Americans is falling, the number of "permanently" unemployed Americans remained at 2.9 million in July. That number rose in May and June when employers turned some of their vacation days into layoffs – something that could hinder the recovery.
This official unemployment rate of 10.2% should fall below the actual unemployment rate from July. The BLS defines the unemployed as unemployed people who are also looking for new jobs. Dismissed workers who receive unemployment benefits but are not looking for a job are not considered unemployed.
The report highlights other anomalies in the labor market. For example, the BLS found in July that 16.3 million Americans were unemployed. According to data from the U.S. Department of Labor, 30.5 million people received the $ 600 unemployment benefit before it expired in July.
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