The US jobs growth slowed sharply in July as the country struggled to control the coronavirus pandemic.
1.8 million jobs have been added last month, down from a record 4.8 million in June.
The US unemployment rate fell to 10.2%, continuing to improve from the high of 14.7% seen in April.
The figures reignited calls for Washington to approve further economic stimulus, though the slowdown was not as bad as many economists had feared.
The US Labor Department report, “confirms that the resurgence in new virus cases caused the economic recovery to slow, but also underlines that it has not yet gone into reverse,” said Andrew Hunter, senior economist at Capital Economics.
The job gains in July came from many of the sectors hit hardest by shutdowns, including restaurants, bars and retail outlets.
Economists have said this kind of hiring, happening as states around the country allow establishments to reopen, represents the “easy” part of a long recovery ahead.
Since February, the US has lost more than 12 million jobs and seen unemployment spike from a roughly 50-year-low of 3.5%.
In Q2 of 2020, the US economy was hit by its sharpest quarterly contraction in more than 70 years of record-keeping, shrinking at an annual rate of 33% or nearly 10% year-on-year.
The 10.2% unemployment rate the Labor Department reported for July is higher than the worst of the 2007-2009 financial crisis, when the jobless rate peaked at 10%.
This week, nearly 1.2 million people filed new claims for unemployment. More than 31 million people – roughly 1 in 5 American workers – continue to collect the benefits.
Economists have said the loss of momentum last month is a sign of the peril facing the economy, as health concerns put a dampener on consumer spending and temporary measures passed in March, including bans on evictions and a $600 emergency boost to unemployment benefits, expire.
While Washington lawmakers have been trying to negotiate further stimulus, many Republicans oppose a deal of the size Democrats say is necessary.
“The most responsible thing we can do is to take proactive measures to allow people to return to work safely, instead of continuing to lock down the economy,” Republican Congressman Kevin Brady said after the report.
Republicans want a deal to include legal protections for employers against virus-related health claims from workers.
They are also pushing to reduce the $600 emergency supplement to unemployment benefits, which expired last month, and have proposed far less aid to local governments than Democrats want.
Their stance has presented a challenge for President Donald Trump, who had hoped to use a strong economy as his calling card to voters in his campaign for re-election in November. He has said he may act unilaterally to extend some aid.
The number of US unemployment claims has hit 33.3 million since mid-March amid coronavirus lockdown, about 20% of the US workforce.
A further 3.2 million Americans sought unemployment benefits last week as the economic toll from the coronavirus pandemic continued to mount.
The number of new claims reported each week by the Department of Labor has subsided since hitting a peak of 6.9 million in March.
However, they remain extraordinarily high.
The number of Americans collecting benefits has continued to rise, despite recent moves to start re-opening in some parts of the country.
Photo Getty Images
Companies such as Lyft, Uber and Airbnb are amongst the companies that have announced cuts in recent weeks, as shutdowns halted significant amounts of travel.
The impact has been felt across the economy, affecting medical practices, restaurants and administrative workers among many others.
Economists say the monthly unemployment rate for April, which will be released on May 8, is likely to reach 15% or higher.
Just two months ago, the unemployment rate was at 3.5%, a 50-year low.
Since the coronavirus has taken hold in the US, the country has suffered its worst growth numbers in a decade, the worst retail sales report on record and declines in business activity not seen since the 2008 financial crisis.
Meanwhile, weeks of elevated unemployment claims have far surpassed the prior record of 700,000.
Food pantries have seen spikes in demand, and homeowners and renters have delayed monthly payments.
The National Multifamily Housing Council – an industry group for apartment owners – reported last month that nearly a third of renters did not make their full payment by the first of the month.
Economists are hoping the pain will ease as businesses gradually restart.
Retailers such as Gap have already announced plans for re-opening some stores. Others, including J Crew and department store Neiman Marcus, have been pushed into bankruptcy.
Moody’s Investors Service has predicted that the US unemployment rate could fall back to 7% by the end of the year, but that forecast depends on the virus. The longer the shutdown persists, the harder it will be for the economy to rebound.
More than 20 million Americans filed for unemployment benefits over the last four weeks, according to Department of Labor filings.
Another 5.2 million Americans lost their jobs last week as businesses remain shut amid the coronavirus lockdown.
The economic crisis comes as the number of US virus cases exceeds 629,000.
The surging joblessness is a stark reversal for the world’s biggest economy where the unemployment rate had been hovering around 3.5%. Economists now expect that rate to have hit double digits.
While the 5.2 million new claims in the week ended April 11 were down from 6.6 million the previous week, the numbers still eclipse prior records.
Many economists warn that elevated numbers will linger, with Goldman Sachs researchers expecting some 37 million claims by the end of May.
Electronics chain Best Buy this week said it would furlough more than 50,000 employees, while Royal Caribbean Cruises announced it would cut or suspend about a quarter of its American workforce.
The moves come as retail sales plunged by a record 8.7%, while manufacturing output dropped by the most in more than 74 years.
The US has expanded its unemployment program, making disbursements bigger and more people – including the self-employed – eligible. Requests to participate have overwhelmed state offices, which process the applications.
On April 16, the Small Business Administration, which is in charge of administering that $349 billion program, announced it had run out of money.
President Donald Trump is expected to issue “new guidelines” for reopening the economy in parts of the country where experts believe the rate of infection is under control.
On April 15, the president said: “There has to be a balance. We have to get back to work.”
More than 6.6 million Americans filed jobless claims in the week ending April 4, the Department of Labor said.
The number of people seeking unemployment benefits has surged for a third week as the economic toll tied to the coronavirus pandemic intensifies.
To shore up the economy, the Fed said it would unleash an additional $2.3 trillion in lending.
The deepening economic crisis comes as the number of Covid-19 cases in the US soars to more than 430,000.
Over the last three weeks, more than 16 million people have made unemployment claims, as restrictions on activity to help contain the virus force most businesses to close and put about 95% of Americans on some form of lockdown.
Labor Secretary Eugene Scalia said: “Today’s report continues to reflect the personal sacrifice being made by America’s workers and their families to slow the spread of the coronavirus.”
The surging unemployment rate is a stark reversal for the world’s biggest economy where the unemployment rate had been hovering around 3.5%. Economists now expect that rate has hit the double digits.
The crisis has prompted dramatic government relief efforts.
The Fed programs on April 9, which include loans to local governments, are the latest actions by the central bank, which has also slashed interest rates, eased banking regulations and announced other programs aimed at supporting home loans, currency markets and small businesses.
Fed Chairman Jerome Powell said the bank is using its emergency powers to “unprecedented extent”.
He said: “We will continue to use these powers forcefully, proactively and aggressively until we’re solidly on the way to recovery.”
The Congress has also passed a roughly $2 trillion rescue bill, which funds direct payment for households, assistance for businesses and increased unemployment benefits. Lawmakers are now discussing further relief.
However, the number of people and companies seeking assistance has overwhelmed rescue efforts so far.
US economy added 227,000 jobs in January 2017, which is way above economists’ forecasts of about 175,000.
According to the Bureau of Labor Statistics, the figure compares with December’s rise of 157,000, revised up slightly from last month’s first estimate.
However, average pay barely rose, and the number of people working part-time but looking for full-time work rose.
The jobs growth suggests that new president Donald Trump has inherited a stronger jobs market.
President Trump has promised to create 25 million jobs over 10 years to become “the greatest jobs president… ever”.
Photo Getty Images
President Barack Obama’s term from January 2009-2017 saw the number of people with jobs increase by 11.25 million.
The job gains in January 2017 occurred in retailing, construction, and financial activities.
The number of unemployed people at 7.6 million was little changed. The unemployment rate edged up slightly to 4.8% from 4.7% in December 2016, but this was due to more people looking for work.
The percentage of adults working or looking for jobs increased to its highest level since September.
As a US presidential candidate, Donald Trump frequently argued that the government’s jobs data exaggerated the health of the economy.
Donald Trump called the unemployment rate a “hoax” and said it declined after the recession under Barack Obama mainly because many Americans stopped working or looking for work.
The Fed has decided to raise its benchmark interest rate by 0.25%, from 0.5% to 0.75%, citing a stronger economic growth and rising employment.
This is only the second interest rate increase in a decade.
The central bank said it expected the economy to need only “gradual” increases in the short term.
Fed chief Janet Yellen said the economic outlook was “highly uncertain” and the rise was only a “modest shift”.
However, the new administration could mean rates having to rise at a faster pace next year, Janet Yellen signaled at a news conference after the announcement.
President-elect Donald Trump has promised policies to boost growth through tax cuts, spending and deregulation.
Janet Yellen said it was wrong to speculate on Donald Trump’s economic strategy without more details.
She added that some members of the Federal Open Markets Committee (FOMC), the body which sets rates, have factored in to their forecasts an increase in spending.
As a consequence, the FOMC said it now expects three rate rises in 2017 rather than the two that were predicted in September.
Janet Yellen told the news conference: “We are operating under a cloud of uncertainty… All the FOMC participants recognize that there is considerable uncertainty about how economic policy may change and what effect they may have on the economy.”
Also, the Fed chairwoman declined to be drawn on Donald Trump’s public comments about the central bank, and his use of tweets to announce policy and criticize companies.
“I’m a strong believer in the independence of the Fed,” Janet Yellen told journalists.
“I am not going to offer the incoming president advice.”
The interest rate move had been widely expected, and followed the last increase in 2015.
Rates have been near zero since the global financial crisis. But the US economy is recovering, underlined by recent data on consumer confidence, jobs, house prices and growth in manufacturing and services.
Janet Yellen said the rate rise “should certainly be understood as a reflection of the confidence we have in the progress that the economy has made and our judgment that that progress will continue”.
Although inflation is still below the Fed’s 2% target, it expects the rise in prices to pick up gradually over the medium term.
The Fed also published its economic forecasts for the next three years.
These suggest that the Federal Funds rate may rise to 1.4% in 2017; 2.1% in 2018; and 2.9% in 2019.
GDP growth will rise to 2.1% in 2017 and stay there, more or less, during those years.
The unemployment rate will fall to 4.5% over the 2017-2019 period, the Fed forecast.
Inflation will rise to 1.9% next year and hover at that level for the next two years.
The dollar rose 0.5% against the euro to €0.9455, and was 0.9% higher against the yen at 116.17 yen.
Following the Fed’s announcement, Wall Street’s main stock markets were largely unmoved, but drifted lower later. The Dows Jones index closed down 0.6%, and the S&P 500 was 0.8% lower.
According to new figures, the US economic growth slowed to an annual pace of 0.5% in Q1 of 2016.
That was a sharp fall from the 1.4% rate of growth in Q4 of 2015 and the slowest pace in two years.
The slowdown, which was bigger than most economists forecast, has been blamed on a fall in domestic demand and a strong dollar that has put a brake on exports.
Photo Getty Images
With shoppers buying less, businesses have been reluctant to order new stock.
Consumer spending, which accounts for more than two-thirds of the US economy, increased at a rate of 1.9%, down from 2.4% in the previous quarter.
Business investment fell by 5.9% – the biggest quarterly decline since the depths of the financial crisis in 2009.
Oil and gas exploration fell by a record 86% as energy companies cut back on spending following the dramatic slide in oil prices.
Although cheaper oil has given consumers more spare cash, it has also cut the profits of businesses dependent on the oil industry.
Despite the economy slowing, unemployment fell below 5% in January, and April 29 jobs report is expected to show steady growth in employment numbers.
On April 28, the Federal Reserve said that “labor market conditions have improved further even as growth in economic activity appears to have slowed”.
According to the latest figures released by the Labor Department, the US economy has created 215,000 jobs in March 2016, a little less than it did in the last month when 242,000 jobs were created.
The unemployment rate has risen to 5% from 4.9%, which was an eight-year low.
According to the Labor Department, more Americans were finding jobs, which suggested a sign of confidence in the US economy.
Photo Getty Images
The increase could allow a cautious Federal Reserve to raise interest rates gradually this year.
The US economy is continuing to create jobs, despite a global economic slowdown and cheap oil prices which have hit the energy sector.
The gains were in the service sectors, especially retail, health and education and leisure and hospitality. There were also new jobs in government and construction.
The unemployment figures for January and February have been revised slightly down to show 1,000 fewer jobs created than previously reported.
Financial markets have almost priced out the likelihood of a rate rise at the Fed’s June policy meeting.
A survey from CME FedWatch suggests a 47% chance of an increase in November, with 57% suggesting it would happen in December.
According to the Labor Department figures, the US economy added only 142,000 jobs in September 2015, lowering the chance of an interest rate rise this year.
The number of jobs created in September was far lower than the 205,000 increase forecast by economists.
The July and August figures were revised down by a combined 59,000.
On October 2, Wall Street opened sharply lower, with the Dow Jones and S&P 500 indexes both down about 1.3%.
However, both indexes later recovered to be up about 0.5% and 0.6% respectively.
The poor figures also resulted in a rollercoaster ride for the FTSE 100, which ended the day up 0.9% at 6,129.9 points despite also turning negative in afternoon trading.
The Labor Department numbers reinforced fears that the China-led global economic slowdown is hitting America’s recovery, adding to doubt about whether the Federal Reserve will raise rates before 2016.
The number of new jobs for August was cut by 37,000 to 136,000 – in sharp contrast to the upward revision expected by economists.
The July total was also reduced, by 22,000 to 245,000.
The number of new jobs created in the US has averaged 198,000 a month for 2014 – below last year’s average of 260,000.
However, the unemployment rate held steady at 5.1%.
The jobless rate, which is derived from a separate survey of households, was unchanged only because 350,000 workers stopped looking for work last month and were no longer counted as part of the labor force.
The proportion of Americans who either have a job or are looking for one fell to a 38-year low, partly reflecting retirements of older workers from the baby boomer generation.
Average hourly wages fell by 1 cent to $25.09 during the month and were only 2.2% higher than the same month in 2014.
The data also knocked the dollar lower, with the pound rising 0.6% to $1.5238 after the numbers were released. Yields on government bonds also fell.
Wall Street closed lower after reports that the US unemployment rate fell to 5.1% last month, the lowest since April 2008.
The latest Labor Department figures also showed the US added 173,000 jobs in August. The figure was below expectations, but the totals for June and July were revised up.
The Dow Jones fell 272.38 points, or 1.66%, to 16,102.38, while the S&P 500 dropped 29.91 points to 1,921.22.
The NASDAQ was down 49.58 points at 4,683.92.
The latest jobs report is the last before the Federal Reserve meets later this month to decide whether to increase interest rates.
The US economy created 223,000 new jobs in April 2015, a much larger increase than the month before.
According to the US Department of Labor, the unemployment rate dropped to a seven-year low of 5.4%, down from 5.5% in March.
Big job gains in the service sector helped to offset weakness in mining,
Investors welcomed the report, sending shares broadly higher on Wall Street.
Many see the report as a sign of solid strength in the economy.
The total was a big improvement on March’s payroll figures, which were revised to show a gain of just 85,000 jobs.
Experts blamed such factors as the exceptionally cold winter in the north-east of the country for weighing on hiring in March.
April’s report also showed gains in employees’ wages, with average hourly earnings up 2.2% from the same period last year.
That was a smaller rise than many market watchers expected.
However, it could provide a boost to US consumer spending, a key driver of the US economy.
Investors are paying close attention to all figures to check that the US recovery is maintaining momentum.
The Federal Reserve is expected to raise interest rates later this year if the economy continues to improve. Benchmark lending rates are currently close to zero.
The US economy added only 126,000 jobs in March – a gain far lower than January and February.
The slower gains mark a break from a 12-month streak where employers added over 200,000 jobs each month.
Severe winter weather, factory slowdowns, and dull construction activity contributed to low numbers.
The unemployment rate held at 5.5%, the US Department of Labor said.
Additionally, the job statistics for January and February were revised down by a combined 69,000 jobs.
Factories shed 1,000 jobs after 19-months of hiring, while the construction industry broke a 15-month streak with same number of losses.
Restaurant hiring took a sharp downward turn, while the sector for mining, logging, and oil drilling lost 11,000 jobs.
Wage growth was unexceptional. Average hourly wages rose just $0.07 – a year-over-year rise of 2.1%.
People in the US worked fewer hours on average in March than they did in February, meaning their actual earnings fell.
Many Americans are out of the labour force, due in part to the large number of so-called “baby boomers” who are reaching retirement age.
In March, only 62.7% of Americans were working or looking for work – a figured tied with the lowest rate since 1978.
Cheaper gasoline and past job growth have not yet boosted consumer spending, and modest wage gains have burdened the US economy since the Great Recession ended nearly six years ago.
The US unemployment rate has fallen to 5.8% after the economy added 214,000 jobs in October 2014, official Labor Department figures show.
The number of jobs created is slightly below forecasts of about 230,000 new posts, but still indicates a healthy US jobs market.
The figures are a significant gauge of the health of the economy.
US employers have added at least 200,000 jobs for nine months in a row, the longest growth period since 1995.
Jobs figures for August and September were also revised higher.
The US unemployment rate has fallen to 5.8 percent in October 2014
The burst of hiring lowered the unemployment rate to 5.8% from 5.9%. That is the lowest rate since July 2008.
Shares in New York were down shortly after the start of trading. The Dow Jones was 0.28% lower at 17505.28.
The number of unemployed in the US has dropped to 8.995 million, below nine million for the first time in six years.
The work force participation rate, which counts those with jobs and those actively seeking jobs, was barely changed in October at 62.8%.
The financial crisis of 2008 has dented that rate, with some people simply giving up the search for work.
Although economic growth has picked up this year and job opportunities with it, this week’s mid-term elections revealed employment was voters’ top worry, suggesting many Americans have not yet felt any improvement.
The US unemployment rate fell from 6.1% in August 2014 to 5.9% in September 2014, official figures have shown.
The rate is the lowest recorded since July 2008.
US Labor Department also said that employers added 248,000 jobs last month, and the job growth figures for August and July were revised upwards.
The jobs figures are seen as a significant gauge of the health of the economy and there has been much debate over when US interest rates will rise.
The US Federal Reserve has kept interest rates close to zero since the financial crisis in 2008.
US markets cheered the news, with the Dow Jones Industrial Average rising over 100 points.
The US dollar was pushed higher as expectations rose that interest rates would go up sooner than previously predicted.
The US unemployment rate in September 2014 is the lowest recorded since July 2008 (photo AP)
“The most important item in this report is the drop in the unemployment rate below 6%. [Fed Chair Janet] Yellen has said there is only so much slack if the unemployment rate falls below 6%,” said Christopher Low, chief economist at FTN Financial in New York.
The Fed’s stimulus program, known as “quantitative easing”, is due to end this month. Its aim was to keep long-term interest rates low using the purchase of bonds, and thus to boost spending.
The Federal Reserve has indicated it will raise short term interest rates if the economy continues to grow. Janet Yellen has given no firm date for the rise, but the Fed has said the move will come a “considerable time” after the stimulus program ends.
The Labor Department said 69,000 more jobs were created in July and August than previously estimated. It also said nearly 100,000 jobseekers stopped looking for work in September.
The largest rise in employment was in professional and business services, including management and legal services, which saw an increase of 81,000 jobs in September.
The retail sector added 35,000 jobs compared with the previous month. Employment in the health care, construction and leisure and hospitality sectors also continued to increase.
The US economy added 209,000 jobs in July bringing the unemployment rate to 6.2%, latest data from the Bureau of Labor Statistics has shown.
The biggest job gains were in professional business services and manufacturing jobs.
On Wednesday, the Commerce Department said the US economy grew by a better-than-expected 4% during the April-to-June period.
In an encouraging sign, the number of people in the US labor market increased slightly, meaning that workers who may have given up looking for a job have now begun to re-enter the jobs market.
The May and June jobs data were also revised upwards to show that the US economy added 15,000 more jobs.
Some economists had been expecting even larger figures, and US stock markets were down on the less-than-expected gains.
The US economy added 209,000 jobs in July bringing the unemployment rate to 6.2 percent
The Dow dropped nearly 80 points, following steep losses the day before.
Nonetheless, most analysts agreed that there was nothing obviously negative about the report.
July is often one of the weaker months for jobs growth, which is one possible reason for the uptick in the unemployment rate.
However, the figures are encouraging, as the US economy needs to add at least 150,000 jobs each month simply to keep up with population growth.
This is the sixth straight month that the US economy has added more than 200,000 jobs.
Yet there are still reasons to be concerned: wage growth remains flat and the number of long-term unemployed – those out of work for longer than six months – was essentially unchanged at 3.2 million, or a third of those looking for work.
US Federal Reserve chair Janet Yellen recently highlighted that while the employment data is certain better than in the aftermath of the 2008-2009 recession, challenges remain.
The Dow Jones Industrial Average has hit 17,000 for the first time.
On July 3, investors pushed shares higher after a better-than-expected jobs report showed the US economy added 288,000 jobs in June.
Overall, low interest rates have led investors to pour money into stocks in an effort to make a profit.
That has pushed US indexes – including the S&P 500 – to new highs in 2014.
On Wednesday, the Dow closed at its 13th record high for the year, and the S&P 500 hit its 24th closing high for 2014.
The Dow Jones Industrial Average has hit 17,000 for the first time
A string of positive economic news combined with increasing merger and acquisition activity has buoyed investor confidence on Wall Street.
Thursday’s positive jobs figure capped a week of good reports globally, including news that China’s manufacturing activity hit a six-month high in June.
Overall, investors have been pouring money into stocks over the past year and a half, partially as a result of the policies of the Federal Reserve.
The Fed has taken extraordinary measures to keep interest rates low in an effort to encourage banks to lend and thus stimulate economic growth.
Low interest rates, however, have also meant that firms are less inclined to keep extra cash on hand where it is not earning money.
That has spurred increased merger and acquisition activity, with companies in the pharmaceutical, food processing, and technology industries all announcing strings of acquisitions in recent weeks.
Some have worried that in keeping rates so low, the Fed is encouraging a bubble in the stock market.
However, on Wednesday, Fed chair Janet Yellen said in a speech in front of the International Monetary Fund that the central bank would not raise rates in an effort to deter financial excesses.
According to latest figures from the Bureau of Labor Statistics, the US economy added 288,000 jobs in June 2014.
The unemployment rate dropped to 6.1%, its lowest level since September 2008.
That figure beat analysts’ expectations and is an encouraging sign after disappointing growth in the first quarter of 2014.
The strong report sent the Dow Jones Industrial Average above 17,000 for the first time as investors cheered the news.
The US economy added 288,000 jobs in June 2014
Economists blamed harsh winter weather for a 2.9% annualized decline in US economic output from January to March.
Jobs growth in professional and business services was particularly strong, with 67,000 jobs being created, followed by gains in the retail sector, which added 40,000 jobs.
Hourly wages – which is a measure watched closely by policy makers and has been recently highlight by Federal Reserve chair Janet Yellen – rose 0.2% in June and have climbed 2.0% for the year.
“There really isn’t anything to be disappointed with,” wrote Jefferies bank economists in a note to clients, noting that manufacturing jobs growth was particularly strong.
“There was a 0.2% dip in the unemployment rate based on “good reasons” and household employment was up strongly,” they added.
One “good reason” was that unlike in past reports, where the unemployment rate has dipped primarily because many Americans had given up looking for work, the June decline seems to be mostly due to actual jobs growth.
The labor force participation rate remained steady at 62.8%, indicating that decline was not due to discouraged workers.
However, long-term unemployment remains an ongoing concern.
The number of US job-seekers who have been out of work for over 27 weeks decreased by 293,000 in June, to 3.1 million people – around a third of those who are out of work.
[youtube B0dTSckxkjE 650]
This website has updated its privacy policy in compliance with EU GDPR 2016/679. Please read this to review the updates about which personal data we collect on our site. By continuing to use this site, you are agreeing to our updated policy. AcceptRejectRead More
Privacy & Cookies Policy
Privacy Overview
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
