Friday’s report had good and bad parts, and economists are still trying to grasp how the labor market behaved in this unparalleled situation.
“We added more jobs than most people expected, but the gains were really disproportionate to part-time workers,” said Kate Bahn, economist and director of labor market policy at the Washington Center for Equitable Growth. “For me, that means even if workers return, it’s going to jobs that pay less, and families will be less.”
Meanwhile, unemployment fell in all demographic groups. The rate remains by far the highest for Black workers at 14.6%, for that matter, Bahn said.
“Research from previous downturns suggests that Black workers are most likely to be expelled,” she added.
Then there are seasonal adjustments, which are based on historical trends in the job market – but because the pandemic is different from any other moment in history, they distort the data at the moment. Without seasonal adjustments, 591,000 jobs were added in July.
That said, one positive sign in this jobs report is the number of permanent job losses: it was more or less flat from June at 2.9 million. This may not sound exciting, but it would have been very bad news for the recovery if the number had gone up.
“Gives even more than double before the crisis, but we’ll take the one-month delay,” said Daniel Zhao, senior economist at Glassdoor.
The share of declared responses was smaller in June and July than in previous months, the BLS said. Including the declared workers, the unemployment rate in July would have been about one percentage point higher than reported.
Head-butting in Washington
Now Congress is debating how to proceed: Democrats want to keep the $ 600-a-week supplement for the rest of the year, while Republicans want to cut it to $ 400-a-week.
For millions of Americans, the expansion of benefits contributes a large portion of their income at present – so cutting back can hamper recovery. At the same time, some economists believe that too much unemployment assistance does not actually deter people from returning to work. The question is what is too much help during an economic crisis of unusual proportions.
“The primary reasoning behind reducing those benefits is that it would push more Americans back into the workforce. But there doesn’t seem to be much evidence for the need to push people back because the jobs there are not are, “said Zhao, Glassdoor’s economist.
This may mean that workers forced to return to work by the lower benefits will have to participate or take more risky jobs than they would otherwise.
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