Slightly fewer jobs created than expected in July in the United States

The unemployment rate continued to decline in July in the United States, despite much fewer job creation than in June due to the resurgence of COVID-19 which has closed the doors of shops and restaurants in many states .

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The US economy created 1.8 million jobs in July, a figure far below the 4.8 million jobs created in June, the Labor Department said on Friday.

The resumption of activity was in fact slowed down by a virus which spread even more vigorously in a large part of the country.

Many states such as California, Texas and Florida have had to close restaurants and stores that had reopened a few weeks earlier.

As for the unemployment rate, it is still falling, going from 11.1% in June to 10.2% in July.

It is now a long way from April’s 14.7%, but still well above February’s 3.5%, its lowest for 50 years.

This rate “will probably not decrease much” before the presidential election of November 3, “and unemployment will remain close to 10%”, anticipates Ian Shepherdson, chief economist at Pantheon Macroeconomics.

US President Donald Trump hailed “super unemployment figures” on Twitter.

About half of those who found themselves temporarily laid off at the end of March, at the start of lockdown, have been rehired, according to Labor Department data.

But the layoffs in March and April were so massive that job creation in May and June still leaves tens of millions of Americans out of work.

In July, about a third of the jobs created were in the leisure and hospitality sectors, hit hard by the COVID-19 pandemic.

As for restaurants and bars, also badly affected, they created 502,000 jobs, a marked slowdown compared to the months of May and June during which a total of 2.9 million jobs had been created. And the sector lost 2.6 million jobs compared to February, before the “Grand Confinement”.

Other sectors that have created jobs are administration, retail trade, business services, and health.

These smaller job creations are a sign of a “slowing down in the pace of the labor market recovery.” In the absence of additional budget support, the economy as a whole risks losing momentum, ”said analysts at Oxford Economics in a note.

Because the White House and the elected representatives of Congress have been trying, for more than two weeks, to agree on a new plan to help the economy, for businesses, households, schools … But also for the unemployed, who have had to tighten their belts since the beginning of the month: assistance of 600 dollars per week, which had been granted to them by the federal government since the start of the crisis, has ended.

However, in the United States, unemployment benefits are paid, depending on the state, for three to six months maximum. The amount ranges from $ 235 to $ 823 per week.

To prevent millions of households from falling into poverty, and allow them to continue to consume to run the engine of American growth, this aid must be extended.

But with less than three months of the presidential election, the discussions are tense.

Its amount is one of the big points of disagreement, between Republicans who propose to lower it to 200 dollars, the White House which negotiates 400 dollars, and the Democrats who want to keep 600 dollars.

Donald Trump said he would decide by decree if negotiations failed, and could sign this text as early as Friday afternoon or Saturday morning.

In all, 32 million people received in mid-July this assistance of 600 additional dollars, alone or in addition to unemployment for those who are entitled to it. At the same time last year, only 1.7 million people were receiving assistance.



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