By the numbers: The unemployment rate dropped to 10.2% from 11.1% in June. Wages grew 0.2% on an annual basis and the labor force declined by 62,000 in June.
Our take: The 1.8 million new jobs is good news, but it is important to put the figure in context. In May and June the economy added 2.8 and 4.8 million jobs, respectively. July saw a slowdown, which is in line with other economic data that has shown a pullback in economic activity with the virus’ resurgence.
Furthermore, when the labor market peaked before the COVID-19 shock in February, there were about 153 million Americans employed. At the end of July that figure was down to under 140 million, leaving a gap of almost 13 million jobs left to be filled. It will take a long time to get back to where we were before the pandemic struck, unfortunately.
Up next: How fast we return to the pre-pandemic high in the labor market will depend on the policy response, especially unemployment benefits. Congress is still debating how to replace the extra $600 a week unemployment benefit that expired last week. The Chamber created interactive tools to help analyze the unemployment insurance plans under consideration. View the 50-state table. Explore the interactive map.
–Curtis Dubay, Senior Economist, U.S. Chamber of Commerce