WAS SHINGTON (Reuters) – U.S. Job Growth Probably. It will slow further in August, as financial aid from the government is threatening the recovery of the economy from the Covid-19 recession.
File photo: Hundreds flee Frank outside the Kentucky Career Center, June 18, 2020 in Frankfurt, Kentucky, USA. In hopes of getting help with their unemployment claims. Rears / Brian Woolston
The Labor Department’s eye-catching employment report will come out on Friday as companies from transport to manufacturing industries announce layoffs or furloughs. That could increase pressure on the White House and Congress to resume stalled negotiations for a second fiscal package and possibly become a political ammunition for both Democrats and Republicans with just two months to go until the Dem presidential election.
Programs for paying wages to businesses have either ceased or are coming to an end. The $ 600 weekly unemployment supplement ended in July. Economists credited the government with a sharp decline in a large number of economic activity after industries almost shut down in mid-March to curb the spread of coronavirus.
“The epidemic has really torn our economic and social trends,” said Sun von Sohn, professor of finance and economics at Loyola Marymount University in Los Angeles. “The end of the financial stimulus has not helped the situation.”
According to a Reuters survey of economists, nonfarm payrolls rose 1.4 million jobs last month, with some expected gains to be made for the 2020 census. Employment rose 1.763 million in July to 4.791 million in June.
Friday’s report 3 Nov. It is one of the only two monthly labor markets left on the lender before the presidential election.
With President Donald Trump, former Vice President Joe Biden, leading the Democratic Party’s back-to-back polls, the economy is likely to recover after suffering its biggest shock in at least 73 years. Quarter.
But employment will still be about 11.5 million from its pre-epidemic level. Most job benefits include workers being called off from furloughs or temporary layoffs. Although the new Covid-19 infection has waned after widespread resurgence during the summer, many hot spots remain.
United Airlines (UAL.O) Said on Wednesday that it Oct Oct. Is preparing to furlough 16,370 workers on the 16th. American Airlines (ALO) Has announced that its operations will be reduced by 40,000, including 19,000 involuntary cuts. Ford Motor Co. (F.N.) Said that by the end of the year, 1,400 U.S. Aims to eliminate salaried jobs. Mass transit rail operators are also eating furloughs.
A report by the Federal Reserve this week showed an increase in employment based on data collected from US Central Bank contacts on or before August 24. However, the Fed noted that “job growth in some districts has been reported to have slowed and job volatility, especially in the service industries, has increased, with workers being permanently laid off due to soft demand.”
Ryan Sweet, senior economist at Capital Analytics in Westchester, Pennsylvania, said other businesses in the restaurant and service industry do not continue to call back workers when demand does not rise. “We need the same excitement as weeks ago.”
To spend in pleasure
According to a Reuters survey, the unemployment rate is expected to fall to 9.8% in August. That would leave it at the top of 10% soon after the end of the Great Recession of 2007-09.
But the measure of the unemployment rate has been biased by those who consider it “employed but absent from work”. As of mid-August, at least 29.2 million people were receiving unemployment benefits.
Lydia Bosour, a senior economist with Oxford Economics in New York, estimates that one in two workers will be unemployed in the payroll, increasing the risk of long-term unemployment.
“The fact that employment is slowing and stabilizing in the trend of grinding improvement is a worrying sign for a broader recovery,” Bosour said. “The absence of financial aid risk, along with the prospect of slower employment growth and poor health, will reduce consumer spending in the coming months.”
The slowdown in job growth in the third quarter will have a limited effect, with economists predicting a year-on-year growth of 0% in the April-June quarter after sinking to a historic high of 71.1%. But it will hurt fourth-quarter GDP, it will succeed because of consumer spending.
Yet the wage epidemic deepened, as job losses were concentrated in low-wage services industries such as restaurants and bars.
After rising 0.2% in July, average hourly earnings are forecast to remain unchanged in Gust. Which will reduce the annual wage increase from 8.8 per cent in July to.% Per cent.
The service sector will have the most expected gains in August Gust. Another 50,000 jobs are expected to be added to manufacturing. Recruiting at least 250,000 workers for the census is expected to increase government pay scales, although education in some states and local governments could lead to a decline in employment.
“We expect education-related employment to be particularly weak, as the back-to-school season will be unusual in many areas,” said Daniel Silver, an economist at JPMorgan in New York.
Reporting by Lucia Mutican; Edited by Chizu Nomiyama
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