The economy gained 1.8 million jobs in July, lowering the unemployment rate to 10.2%, the Labor Department reported on Friday, as robust jobs growth has apparently slowed.
Forecasters expected about 1.5 million jobs to be added.
While the unemployment rate dropped 0.9% from June, it is still far higher than the 3.5% rate from February, before the pandemic hit.
Another troubling sign is that July’s job report shows that jobless workers are not quickly returning to employment. The number of workers who were jobless less than 5 weeks increased by 364,000 to 3.2 million in July.
July marks the third straight month of record gains, but is still short of what’s needed to regain the number of jobs lost earlier in the year.
Before the pandemic, creating over a million new jobs in a single month would have been historic. In fact, the federal government, which began tracking jobs in 1947, never recorded a gain or loss of a million jobs in a single month until this year.
But with a staggering 22.1 million jobs lost in March and April and 5 million jobs created in May and June, July’s jobs number is anemic and supports the notion that hiring has stalled.
One issue hindering the recovery is the spike in coronavirus infections in several states. The country is nearing 5 million cases, and several states have either rolled back or paused reopening their economies to help stem the increase of infections, which inhibits hiring.
In July, the leisure and hospitality sector saw the largest employment gains with 592,000 jobs added in July. This sector accounted for one-third of all job gains in July.
Of the over 590,000 jobs created in this sector, nearly all of them, 502,000, occurred at restaurants and bars. Still, July’s gains are nothing compared to the gains of 2.9 million in May and June.
The retail sector saw 258,000 job increases in July. However, employment in that industry remains 913,000 lower than in February.
Nearly half of the employment gains in the retail sector occurred in clothing stores with 121,000 jobs added. By contrast, general merchandise stores, like warehouse clubs and supercenters, lost 64,000 jobs.
The professional and business services sector gained 170,000 in July, but still remains 1.6 million below its job level in February.
