July jobs report beats estimates as businesses add 943,000 payrolls amid steady recovery

Help wanted sign
Restaurant storefront on Middle Neck Road in Great Neck has “Help Wanted” sign in window on July 15, 2021.

  • July job gains totaled 943,000 payrolls in July, exceeding the median estimate of 870,000 new jobs.
  • The unemployment rate fell to 5.4% from 5.9%, beating the 5.7% forecast.
  • The print shows job creation persevering as COVID cases rebounded and enhanced unemployment benefits lapsed.
  • See more stories on Insider’s business page.

Job growth in the US exceeded economists’ expectations in July, signaling the labor market’s recovery was mostly unscathed as COVID cases rebounded.

The country added 943,000 nonfarm payrolls last month, the Bureau of Labor Statistics said Friday. The gain beat the median forecast of 870,000 new jobs from economists surveyed by Bloomberg. It also marks a healthy acceleration from growth seen the month prior, which was revised to 938,000 payrolls from 850,000.

The July increase serves as the seventh straight month of job additions and leaves 8.7 million Americans still unemployed. The unemployment rate dipped to 5.4% from 5.9%, also beating the median estimate of 5.7%.

“Despite the improvement, we still have a ways to go with the economy remaining 5.7 million jobs short of the pre-pandemic level. But things are undeniably moving in the right direction,” Greg McBride, chief financial analyst at Bankrate, said.

The labor-force participation rate rose slightly to 61.7%. The measure has taken on more relevance in recent months as businesses face difficulties hiring. The labor-shortage phenomenon has prompted many firms to lift wages in hopes of attracting workers. While conservative economists and politicians have blamed enhanced unemployment benefits for slower-than-expected hiring in the spring, Federal Reserve Chair Jerome Powell has said school closures and virus fears also stifled participation through reopening.

Wage growth exceeded expectations once again, with average hourly earnings climbing 11 cents to $30.54. The uptick in wages – particularly in the hardest-hit service sectors – signals businesses paid more upfront to counter the labor shortage.

The Friday print also reveals businesses continued to hire despite the Delta variant of COVID-19 spreading across the US. Daily case counts leaped from their recent lows throughout July and ended the month at their highest levels since February.

To be sure, the BLS report’s survey period ended in the middle of July, before headlines on the Delta variant gripped the country. The past week also saw state and local governments reinstate some mask-wearing rules to curb the virus’s spread, raising some concerns that another wave of infections could hinder the recovery.

Progress toward the new normal

The government’s monthly employment report gives the most detailed snapshot of which businesses hired the most and previews what the post-pandemic labor market might look like.

The U-6 unemployment rate – which includes people working part-time for economic reasons and those marginally attached to the labor force – dropped to 9.6% from 10.1% on an unadjusted basis.

The leisure and hospitality sector again added the most jobs, with a gain of 380,000 payrolls. Two-thirds of the gains were in restaurants and bars. The sector is still down about 1.7 million jobs from levels seen just before the pandemic.

Local government education followed with a 221,000-payroll increase. The retail sector shed the most payrolls with a decline of roughly 6,000 jobs.

“While local government education added a large number of jobs this month, the private sector is driving the acceleration,” Nick Bunker, economic research director at employment website Indeed, said. “This means the rise in growth this month is not just a statistical quirk. The labor market is gaining momentum.”

About 5.2 million Americans cited COVID-19 as the main reason why their employers closed down. That’s down from 6.2 million in June. The number of Americans naming the pandemic as the primary reason they didn’t seek work held at about 1.6 million.

The share of Americans working remotely fell to 13.2% from 14.4%. While down from last year’s highs, the reading suggests a significant proportion of workers will continue telecommuting even after the pandemic fades.

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These 5 key numbers are currently defining the Biden presidency from unemployment to vaccinations

Joe Biden
President Joe Biden delivers a speech on voting rights at the National Constitution Center in Philadelphia on July 13, 2021.

  • President Joe Biden will mark six months in office on July 20.
  • Biden enjoys unified control of government, but the Senate still has its complications.
  • The administration has focused on battling COVID-19 and is strategizing how to continue the fight.
  • Sign up for the 10 Things in Politics daily newsletter.

On July 20, President Joe Biden will have been in office for six months.

Since their January inauguration, Biden and Vice President Kamala Harris have been met with a host of challenges, most notably the coronavirus pandemic, which, since last year, has upended life as we know it.

However, on a range of issues, from steering a largely-reopened economy and facing immigration challenges at the US-Mexico border to reshaping the country’s standing on the world stage and putting an imprint on the federal judiciary, Biden has made a clear pivot from the administration of former President Donald Trump.

Biden, who represented Delaware in the US Senate for 36 years before serving as vice president for eight years, is certainly not new to Washington, DC. But that familiarity has so far helped Biden navigate a city that he’s intimately familiar with, despite being a place that has also become much more partisan in recent decades.

Here are five key figures that currently defining the trajectory of Biden’s young presidency:

5.9%

In April 2020, during the height of the coronavirus pandemic, the US unemployment rate sat at 14.8%, a dizzying number that reflected the economic pain caused by businesses forced to shut down because of the deadly virus.

The June unemployment rate was 5.9%, with the economy adding 850,000 jobs last month, according to data from the Bureau of Labor Statistics. The economy added 583,000 jobs in May and 269,000 jobs in April, respectively, so June’s numbers are a welcome sign in the long recovery in a post-COVID world.

The unemployment rate rose by 0.1% from May to June, but it was a reflection of an expanding job workforce.

Earlier in the spring, there were some concerns about job growth and the effectiveness of the $1.9 trillion COVID-19 relief package championed by Biden and congressional Democrats.

However, as COVID-related restrictions eased and vaccination rates increased since the beginning of the year, the economy has clearly benefited.

60.3%

After nearly six months in office, FiveThirtyEight’s polling average has Biden’s overall approval rating at 52.4%, with 42.5% disapproving of his performance, reflective of his relatively stable numbers over the past few months.

However, when it comes to Biden’s handling of the coronavirus, the FiveThirtyEight polling average has Biden at 60.3% approval, with 31.6% disapproving. Trump after his first six months in office held an 39% approval rating, with 55% disapproving, making him the most unpopular president at the 6-month mark, according to FiveThirtyEight.

Biden has consistently had higher numbers for his handling of COVID-19 relative to his overall approval rating, even among Independents and Republicans.

161.2 million

As of July 18, 161,232,483 Americans have been fully vaccinated, representing 48.6% of the total population, according to the Centers for Disease Control (CDC).

Fully-vaccinated individuals have received two shots of the Pfizer-BioNTech or Moderna COVID-19 vaccines, or one shot of Johnson & Johnson’s Janssen COVID-19 vaccine.

However, 186,038,501 Americans have received at least one dose, which equates to 56% of the total population.

seattle covid vaccine
Byron Saunders holds his wife Joyce’s hand as she gets the Pfizer COVID-19 vaccine at a community vaccination site in Seattle, Washington on March 13, 2021.

Read more: Joe Biden just fired a top Trump holdover at the Social Security Administration, but these 7 other Trump-era officials are still holding high-level government positions

While many people were fighting to find appointments earlier this year, many sites offer now walk-in appointments as vaccination rates lag in many parts of the country.

Vaccine hesitancy is a real thing, and Biden, who pledged to prioritize fighting the virus during his presidential campaign last year, is trying to find new ways to encourage people to get their shots, especially as the highly infectious Delta variant of the coronavirus takes hold across the country.

The administration missed its goal of 70% of the population having received at least one vaccine shot by July 4, but Biden recently outlined a strategy of a door-to-door effort to help protect the unvaccinated against the virus, along with getting vaccines to primary-care physicians and physicians.

50

Earlier this year, Democrats were thrilled to win back control of the Senate after sweeping the dual Georgia runoff elections, which gave them 50 Senate seats. However, with Republicans also possessing 50 seats, Democratic control is only a reality due to Harris’s ability to break ties in the evenly-divided chamber.

While Democrats have been able to get virtually all of their major Cabinet and administration nominees through the Senate, along with their ability to push through judicial nominees, they still have to contend with the legislative filibuster, which can be used when major legislation fails to meet the 60-vote threshold to cut off debate.

Joe Biden with bipartisan group of senators.
President Joe Biden with a bipartisan group of senators.

Party leaders desperately want to pass their marquee For the People Act, or S.1, the sweeping voting-rights bill that would end partisan gerrymandering, expand early and absentee voting, and establish national standards for voter registration, among other measures.

However, moderate Sens. Joe Manchin of Arizona and Kyrsten Sinema of Arizona have not relented from their longstanding pledges to keep the filibuster intact, which will continue to limit how much the administration can actually sign into law.

$3.5 trillion

Senate Democrats last Wednesday reached a deal on a $3.5 trillion infrastructure bill that would feature infrastructure priorities focused on childcare, clean energy, and education. This legislation would be separate from the bipartisan $1 trillion infrastructure framework crafted by a small group of senators and the White House.

However, the bill will have to be passed through reconciliation, which Republicans have already rejected on the grounds of its cost and its reach into areas that they deem as unrelated to infrastructure.

By using the budget reconciliation process, Democrats can pass the bill with a simple majority and avoid a filibuster.

Democrats are determined to pass a larger party-line package, though, and with the filibuster still intact, now will likely be the party’s best chance to enact such a massive piece of legislation before the 2022 midterm elections.

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Indiana resumes federal pandemic unemployment benefits after court ruling

Eric Holcomb
Gov. Eric Holcomb of Indiana.

  • Indiana on Friday resumed paying federal pandemic unemployment benefits.
  • The payments, which stopped on June 19, will be retroactive to the week ending on June 26.
  • Maryland was recently ordered to continue its federal unemployment supplemental payments.
  • Sign up for the 10 Things in Politics daily newsletter.

Indiana on Friday resumed paying pandemic unemployment benefits, including the weekly $300 enhanced federal supplement, after the state Court of Appeals denied the state’s attempt to continue halting the disbursements, according to The Indianapolis Star.

Since the programs restarted, the Indiana Department of Workforce Development has already paid 25,000 people, with over 100,000 Hoosiers expected to file for the benefits, according to the Star.

The payments, which stopped on June 19, will be retroactive to the week ending on June 26.

“There will be no gap in payments for eligible claimants,” said Regina Ashley, the chief unemployment insurance officer at the department.

Republican Gov. Eric Holcomb initially cut off the enhanced federal payments in June, citing the need for unemployed residents to get back into the workforce.

Holcomb was one of 26 state leaders who said that they would terminate at least one of three pandemic unemployment insurance programs that Congress passed last year at the start of the COVID-19 pandemic and extended since that time.

Read more: Exclusive documents show which Pence aides are still getting government paychecks

The governor’s action prompted a lawsuit from jobless workers in mid-June, who argued that state law requires officials to seek all relevant federal insurance benefits for residents.

The federal programs that were enacted into law also include benefits for freelance workers and independent contractors who may have exhausted their state unemployment benefits.

A group of unemployed residents in states that include Ohio and Texas have also filed lawsuits to restore federal benefits. A similar lawsuit is expected in Florida early next week.

In Maryland, Republican Gov. Larry Hogan sought to end federal benefits early, but a Baltimore Circuit Court Judge this week ruled that the state’s unemployed residents should continue to receive the federal benefits.

Hogan’s office expressed that while it “fundamentally disagrees” with the decision, it will not appeal the ruling, meaning the benefits will likely continue until early September.

The $300 weekly supplemental benefit, which was part of the $1.9 trillion COVID-19 stimulus package signed into law by President Joe Biden, is set to expire in September.

Republicans have long insisted that the enhanced aid has dissuaded people from returning to the workforce, criticizing its effect on job creators. Most Democratic-led states have embraced the aid, calling it an indispensable resource for the unemployed as the country aims to recover from the coronavirus pandemic.

Read the original article on Business Insider

June jobs report trounces expectations with 850,000 payroll gains as labor-market recovery picks up

Job interview california
Ray Liberge, 48, of Lawndale, talking to Jacky Estrada, the human-resources manager for the Zislis Group, after getting hired as a line cook at Rock’N Fish in Manhattan Beach, during a job fair at The Brews Hall in Torrance.

  • The US added 850,000 payrolls in June, beating the median estimate of a 720,000-payroll gain.
  • The unemployment rate rose to 5.9% from 5.8%. The median estimate was for a drop to 5.6%.
  • The payrolls increase is the largest since August and marks a sixth straight month of additions.
  • See more stories on Insider’s business page.

Hiring accelerated again in June as Americans returned to the workforce and reopening further juiced demand.

The US economy added 850,000 nonfarm payrolls last month, the Bureau of Labor Statistics announced Friday. The median estimate from economists surveyed by Bloomberg was for an increase of 720,000 jobs. The data suggests the labor shortage waned as businesses raised pay to attract workers.

The June print marks the strongest month of job growth since August and the sixth consecutive month of payroll additions. May payroll additions were revised to 583,000 from 559,000.

The unemployment rate rose to 5.9% from 5.8%. Economists expected the headline rate to hit 5.6%.

The labor-force participation rate was unchanged at 61.6%. The metric has become the go-to gauge for tracking the nationwide labor shortage. Hiring unexpectedly slowed through the spring as virus fears, childcare costs, and enhanced unemployment insurance kept Americans from seeking work. Firms have since raised wages to pull in job applications.

Average hourly earnings rose again, by 10 cents, to $30.40. The gain signals firms still lifted wages into the summer to speed up their hiring efforts.

“This pace of progress is solid and it looks like things can get even better,” Nick Bunker, an economic research director at the hiring website Indeed, said. “There’s still quite a bit of damage left to repair, but today’s report suggests that we may rebuild sooner rather than later.”

Snapshot of recovery

The monthly BLS report is among the most detailed snapshots of the labor market’s performance and gives new insights as to how the broader economy is recovering.

Even after the month’s stronger hiring, about 9.5 million Americans remain unemployed. Total payrolls are still about 6.8 million shy of their pre-pandemic peak.

The U-6 unemployment rate – which counts Americans working part time for economic reasons and those marginally attached to the workforce – rose to 10.1% on an unadjusted basis from 9.7%.

Gains were largest in the leisure-and-hospitality and accommodation sectors, where businesses added 343,000 and 75,000 payrolls, respectively. In leisure and hospitality, restaurants and bars counted for more than half of the gain.

The construction industry lost the most jobs, with a decline of 7,000 payrolls.

Roughly 6.2 million Americans named the pandemic as the primary reason their employer ended operations, down from 7.9 million. About 1.6 million cited the pandemic as the main reason they didn’t seek work, down from 2.5 million in May.

The share of Americans telecommuting fell to 14.4% through the month. That compares with the May share of 16.6%.

Experts see encouraging growth through the 2nd half

June stands to represent a turning point for the labor market’s recovery. The month saw the first few states end the federal boost to unemployment insurance ahead of its September expiration. Twenty-six states – all but one governed by Republicans – have announced plans to prematurely cancel the benefit, saying the move should encourage Americans to return to the workforce.

While the set of cancellations aren’t reflected in the June jobs report, jobless claims data out Thursday suggests the plan is working. Filings for unemployment benefits fell to 364,000 last week, beating economist estimates and marking a new pandemic-era low. Continuing claims still rose, suggesting Americans on unemployment insurance weren’t yet rushing to find jobs.

Survey data backs that up. Just 10% of surveyed job seekers urgently sought work in late May and early June, Indeed said. The most cited reasons for the slow return to work were virus fears, employed spouses, and financial cushions.

Those factors keeping Americans from taking jobs should fade as schools reopen and vaccination continues, Federal Reserve Chair Jerome Powell said. Americans can look forward to “strong job creation building up over the summer and going into the fall,” he told reporters during a June 16 press conference.

He added that while hiring stumbled in April, some of the slowdown was most likely caused by a skills mismatch between workers and open jobs. There “may be something of a speed limit” on the recovery as people look for work in new areas, Powell said.

Read the original article on Business Insider

Unemployment declining faster in states that are cutting off $300 enhanced federal benefits, according to WSJ

Kansas City, Missouri
Kansas City, Missouri.

  • Unemployment is declining faster in states ending weekly $300 federal benefits, per the WSJ.
  • Missouri ended enhanced federal benefits for unemployed state residents as of June 12.
  • The state’s unemployment rate sits below the national average, but many continue to struggle.
  • Sign up for the 10 Things in Politics daily newsletter.

The number of Americans receiving unemployment benefits is declining at a faster rate in Missouri and 21 other US states that opted out of receiving enhanced federal payments this month, according to The Wall Street Journal.

Under the $1.9 trillion COVID-19 relief package that President Joe Biden signed into law in March, weekly federal pandemic compensation of $300 was added to state unemployment checks, with the benefits slated to expire in September.

Republican-led states recently moved to cut off the expanded unemployment aid, decrying its effect on job creators and alleging that the extra money keeps individuals from seeking millions of open jobs. Most Democratic-led states have embraced the aid, calling it a vital resource for the unemployed as the country continues to recover from the coronavirus pandemic.

GOP Gov. Mike Parson of Missouri said that federal benefits were gladly welcomed during the height of the pandemic, but with much the economy reopening, the continuation in payments “worsened the workforce issues” the state faced.

Amid concerns about a labor shortage, most GOP governors nixed what they saw as overly-generous federal aid.

In May, the Missouri’s unemployment rate was 4.2%, below the national average of 5.8%, according to data from the Department of Labor.

Missouri ended enhanced federal benefits for unemployed state residents as of June 12, making it one of the first states to take the action.

Seven additional states followed suit for the week ending June 19, and this weekend, 10 additional states will end aid to unemployed residents.

By July 10, four more states will have cut off enhanced benefits.

Read more: Meet 7 BidenWorld longtime consiglieres and a couple relative newcomers who have access to exclusive White House meetings

The number of individuals who received unemployment benefits decline by 13.8% by the week ending June 12, compared to mid-May, in states where governors explicitly said that enhanced benefits would end in June, based on an analysis by Jefferies LLC economists.

This figure compares to a 10% decline in states that are ending benefits in July, and a smaller 5.7% decline in states that intend to keep the benefits until the funding ends in September.

Impacted individuals would lose the $300 federal funding, but will continue to receive state unemployment benefits.

Aneta Markowska, Jefferies’ chief financial economist, told the Journal the result of states opting out of enhanced benefits was beginning to show.

“You’re starting to see a response to these programs ending,” she said, adding that “employers were having to compete with the government handing out money, and that makes it very hard to attract workers.”

However, some economists and a wide swath of Democrats point to issues such as a lack of adequate child care, low hourly wages in some industries, and a continued trepidation over COVID-19 in explaining why many have not rejoined the workforce.

In Missouri, the state’s workforce fared relatively well, with its unemployment rate peaking at 12.5% in April 2020, compared to the 14.8% national unemployment rate that month.

However, despite the less-than-dire outlook that comes from looking at the overall numbers, real people continue to struggle.

The Journal spoke with Davina Roberson, a 45-year-old Fenton, Mo., mother of two boys with special needs who was furloughed from her $26-an-hour position as a corporate travel agent last year.

While she continued to receive critical health benefits through her old employer, she would have to forgo the coverage if she took another role.

Roberson told the Journal that she has now sought help from food pantries and charities for clothing.

“It’s not that I don’t want to go back to work,” Ms. Roberson told the Journal. “But if I took a minimum wage job, I’d be working for health insurance and child care and have nothing left to live on.”

Read the original article on Business Insider

3 reasons the disconnect between high unemployment and available job openings could continue long-term, according to Morgan Stanley’s wealth-management CIO

Lisa Shalett
Lisa Shalett, the chief investment officer of wealth management at Morgan Stanley.

  • Lisa Shalett analyzed the disconnect between robust hiring demand and elevated joblessness.
  • The Morgan Stanley wealth-management CIO named three factors that could make the disconnect persist.
  • They are accelerated retirements, a growing skills gap, and geographic imbalances in the labor pool.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

The number of job openings in the US reached a record high of 9.3 million in April. At the same time, the unemployment rate remained elevated at 5.8%, according to data from the US Bureau of Labor Statistics.

The disconnect between these figures has been the source of debate for many economists and market watchers.

Now, Morgan Stanley is shedding some light on why the US economy may be seeing such a dynamic.

In a blog post this week, Lisa Shalett, Morgan Stanley’s chief investment officer of wealth management, described three reasons behind the high levels of unemployment amid record available job openings. She detailed the challenges facing both employers and job seekers in today’s jobs market.

Shalett says job seekers are struggling with public-health concerns, the availability of childcare, and the seasonality of school reopenings, while also noting that some experts believe pandemic-related federal aid might dissuade some unemployed people from returning to work.

On the other hand, Shalett says employers are struggling to find talent, with some manufacturers even cutting shifts to avoid operating at a loss.

Shalett goes on to reveal three main reasons the disconnect between high unemployment and available job openings might linger.

Accelerated retirements

The first factor Shalett cited in her blog post was accelerated retirements. According to Morgan Stanley’s chief US economist, in the 12 months to February, the US retiree population jumped by 2 million.

Shallet said this trend couldn’t be explained by aging alone and might lead to a persistent gap between unemployment and job openings.

A widening skills gap

The second factor is a widening skills gap between what employers need and what employees have to offer.

The CIO said this suggested there was a tighter labor market than indicated by headline unemployment data, as companies compete for a smaller field of qualified workers.

A Beyond Skills survey of 1,000 executives across several sectors found that more than 60% of business leaders believed the events of 2020 had widened the skills gaps in their businesses, per City AM.

Geographic imbalances in the labor pool

Finally, Shalett highlighted “pandemic relocations” that had become permanent. She said resulting geographic imbalances in the labor pool had added to the disconnect between the number of jobs on offer and the number of job seekers.

Nearly 36 million people changed addresses in 2020, according to data from the US Postal Service. And a CBRE analysis found that “net move-outs from high-cost coastal cities increased.”

Shalett warned clients in her post that if these factors continued to foment a tighter labor market, it could cause inflationary pressure.

She said investors should watch average hourly earnings, total real income, and the Employment Cost Index for evidence of “sticky inflation.”

The CIO also recommended investors “emphasize security selection, with a focus on companies that have pricing power and levers to sustain profit margins in the face of growing headwinds.”

Read the original article on Business Insider

25 states are moving to end unemployment benefits. 15 of them have lower than average vaccination rates.

sears vaccine
People pass walk by the Vaccination center at the Townsquare Mall in Rockaway, New Jersey on January 8, 2021. – Governor Murphy toured a vaccine “mega” site at a former Sears store in Morris County, where health officials hope to vaccinate more than 2,000 people per day in coming weeks once the vaccine arrives.

  • 25 states are cutting off extra federal unemployment benefits early.
  • That decision will impact about four million workers, and cause many to lose benefits completely.
  • Almost every state cutting benefits is still below pre-pandemic employment.
  • See more stories on Insider’s business page.

Half of all states in America are ending their participation in federal unemployment benefits early, leaving millions of workers with greatly reduced benefits – or no benefits at all.

Twenty-three of these states are still below pre-pandemic employment, while 15 have lower than average vaccination rates. That means that workers being pushed back into the workplace – especially in the service industry – may find themselves exposed to more unvaccinated customers.

It also means that more workers in those states are still actively looking for, but not finding, work, indicating that those states may not actually be ready to pull the plug on increased benefits.

Even so, at least four million workers stand to see their benefits slashed or cut completely, according to an estimate from Andrew Stettner at the left-leaning Century Foundation. Overall, according to Stettner, 2.1 million workers on Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) – both federal programs – will completely lose their benefits.

People receiving those include newly eligible gig workers, who have not traditionally been able to receive benefits, and those who have been unemployed long enough to exhaust regular state benefits.

Governors have cited higher unemployment benefits as a disincentive for workers returning, although the story may be more complex. Some workers are rethinking what they want out of work completely, while others have found their industries irrevocably altered by the pandemic’s economic devastation.

All of the states moving to end their unemployment benefits are led by GOP governors. An economic research team at JP Morgan said in a note that it “looks like politics, rather than economics, is driving early decisions to end these programs.”

But one reason that workers may not be returning is continued COVID safety concerns. People over 55 and those with young children have been primary drivers of the drop in the labor force, according to a research note from UBS economists led by Andrew Dubinsky.

Vaccination rates are low in many of the states cutting benefits

In states moving to end their participation in federal unemployment benefits early, the population tends to be less vaccinated. Four of the five states with vaccination rates under 40% are opting out of federal UI.

Vaccination rates are lower in the states that are cutting benefits. Using CDC data from May 27, the average rate among those cutting states is 45.95%, while the rate is 55.14% among states continuing these benefits.

The following map shows the share of adults, aged 18 and older, in each state that are fully vaccinated as of May 27. States marked with an “X” are those cutting federal unemployment benefits.

Louisiana is the only one of the five states with vaccination rates of 40% or lower not cutting benefits. Only four of the 25 states cutting federal unemployment benefits have rates of at least 55%, while 14 states not cutting benefits have rates of at least 55%.

Some states ending benefits are close to pre-pandemic employment

Almost every state is still below pre-pandemic employment, but those cutting benefits seem to be closer to employment levels seen in Feburuary 2020.

The following map shows the percent change in employment from February 2020 to April 2021. States marked with an “X” are those cutting federal unemployment benefits.

Some of the largest employment gaps are in states not cutting benefits, such as Hawaii, New York, and Nevada. Twelve states not cutting benefits are at least 7.0% below their pre-pandemic employment. Alaska has the highest percent decline among the states cutting benefits at -6.9%, followed by Florida at -5.5%.

Some states cutting benefits seem to be closer to getting back to February 2020 employment, such as Montana and South Dakota. These two states are less than 2% below pre-pandemic employment as of April 2021. Utah and Idaho, two states that are soon cutting benefits, are the only states above pre-pandemic employment at 1.2% and 1.5% respectively.

Texas has an unemployment rate above the current national rate and is 3.4% below pre-pandemic employment as of April 2021. On May 17, Gov. Greg Abbott made the announcement that benefits would end come June 26. Texas is the largest state to announce an early termination of federal unemployment benefits.

Dina Jones, 54, is one of those unemployed Texans. She lives in the Houston metropolitan area, and is currently receiving PUA. That means that, come June 26, she will lose all of her benefits.

“We’re scrambling faster to try to find a job,” Jones told Insider, saying she’s overlooked for roles every single week. She added: “I do agree that we should all go to work and we should not be collecting from the government, but he [Abbott] dropped it so fast. People are going to be scrambling.”

A report from the left-leaning Economic Policy Institute (EPI) found that “nearly all the states cutting UI still have significantly fewer jobs than before the pandemic.” In Texas, for instance, nearly one million workers are “officially unemployed,” meaning that they’re actively looking for work but haven’t had luck yet.

Jones is one of them. She said she’s tired of being home all the time, and wants to work. But what stings is hearing Abbott say that that there are plenty of jobs out there, especially since they pay significantly lower than what she used to earn. She said she’s still getting rejected from jobs that pay half of her prior wage.

“What are you telling me, Governor Abbott, that I’m supposed to go to be a cashier?” she said. If she has to go take one of those lower-paying jobs, “I will come home and cry every day of the rest of my life.”

Read the original article on Business Insider

April’s dismal jobs report shows the 2019 economy is not coming back and that’s a problem

bartender
The US is reopening to a reshaped economy where consumer spending is recovering faster than jobs.

  • The US economy only added 266,000 jobs in April, far less than economists’ predictions of 1 million.
  • While leisure and hospitality showed the biggest gain, they were still far below pre-pandemic norms.
  • The jobs report signals that the reopened economy won’t look like 2019’s for a long time.
  • See more stories on Insider’s business page.

April’s jobs report is a big yikes.

The US economy only added 266,000 nonfarm payrolls last month, the Bureau of Labor Statistics announced Friday. That’s way less than 1 million, the median estimate for payroll gains by economists surveyed by Bloomberg. While it was the fourth consecutive month of payroll increases, it was the smallest since September.

As a Morgan Stanley note from economist Robert Rosener’s team stated, “The expected ‘string’ of strong jobs reports has started to look more like a modest trail of crumbs.”

In the process, unemployment has risen again, albeit slightly from 6% to 6.1%, it was the opposite direction of the forecasted decline to 5.8%.

Job growth was strongest in the leisure and hospitality sector, adding some 331,000 payrolls. More than half of this increase was linked to hiring in food services and bars, offsetting declines in other sectors such as temporary help services.

The staggering numbers indicate that while the economy is still set to come roaring back to life this year, it won’t look anything like it did in 2019, and jobs may not come back at nearly the same rate as consumer spending ramps up.

Consumer spending recovering faster than jobs

The US economy is on the verge of a glow-up. Vaccines are increasingly finding their way into arms, big cities are reopening, and Americans are sitting on $2.6 trillion in excess savings, between three stimulus checks and a decline in discretionary spending.

They’re already swiping their cards on things like outdoor activities, transit, restaurants, clothes, and beauty as they prepare for what Insider reported is shaping up to be a “hot vaxx summer.” Economists expect this to continue, predicting that a lockdown lift will see the biggest boomtime in a generation.

But the return of consumers to the economy hasn’t yet been matched with blowout job growth, which is putting the predicted post-pandemic boom in a new light. The US is still down roughly 9.8 million jobs from its pre-pandemic peak. While relaxing restrictions is expected to help narrow this gap within the incoming months, April’s payrolls spark concern over how easy these gains will be.

The disruption to the experience economy is still taking its toll. Leisure and hospitality may have seen the most job gains in April, but employment in certain industries of this sector still hasn’t reached pre-pandemic levels.

Hallmarks of the 2019 economy that suddenly went on pause last year – the payrolls of motion picture and sound recording industries, travel arrangement and reservation services, performing arts and spectator sports, and accommodation – were all still at least 25% below where they were before the pandemic. Hollywood and travel may not look the way they once did on the jobs front – or not for years, meaning job gains will have to come from somewhere else.

Reopening to a reshaped economy

Experts have been warning of millions of jobs permanently lost to the pandemic, Insider’s Ben Winck reported.

Countries will need to “think well in advance” of what a post-pandemic economy will look like so as to add jobs where they’re going to be, Kristalina Georgieva, managing director of the International Monetary Fund, said in a Thursday video conference. Federal Reserve Chair Jerome Powell also noted that millions of Americans will struggle to find work as they acclimate to a permanently changed labor market.

“The real concern is that longer-term unemployment can allow people’s skills to atrophy, their connections to the labor market to dwindle, and they have a hard time getting back to work,” he said in the conference. “It’s important to remember we are not going back to the same economy, this will be a different economy.”

However, some experts remain optimistic. Jason furman, former top economist to former president Barack Obama, said on MSNBC Friday that he expects hiring to pick up during the summer. “I think we’re gonna see a hot summer in the labor market,” he said.

Lockdown lifts are just beginning and vaccinations are still rolling out. That is all to say: it’s still early on. But that we’re in the first stages of a recovery means that the 2019-vintage experience sector of the economy won’t snap back instantaneously, and that other industries are still grappling with the worker effects of not having properly estimated demand for goods during the pandemic.

April’s jobs report was a strong signal that recovery won’t be as simple as going back to the economic playbook from the before times. Instead of seeing an economy restored to what it once was, we might see an economy reshaped into something new.

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The economy added almost 1 million jobs in March, but 14.3 million people are still jobless

Coronavirus movie theater
Moviegoers shop at concessions before the movie “Godzilla vs. Kong” on the reopening day of the TCL Chinese theatre during the outbreak of the coronavirus disease (COVID-19), in Los Angeles, March 31, 2021.

  • The March jobs report trounced forecasts, but some unemployment gauges show a steep climb ahead.
  • The “real” unemployment rate used by Fed Chair Powell and Treasury Secretary Yellen fell to 8.7% from 9.1%.
  • The measure includes misclassifications and workers who dropped out of the labor force since February 2020.
  • See more stories on Insider’s business page.

The March jobs report was a hugely positive surprise.

The Bureau of Labor Statistics said Friday that 916,000 nonfarm payrolls were added last month. That compares to the 660,000 expected by economists surveyed by Bloomberg and an upwardly revised gain of 468,000 jobs in February. The headline unemployment rate fell to 6%, matching the consensus forecast.

The data signals that the $1.9 trillion stimulus passed in March and gradual reopening drove a strong rebound for the labor market. Leisure and hospitality businesses – those hit hardest by the pandemic and related lockdowns – counted for one-third of the month’s additions. Construction firms added roughly 110,000 payrolls after hiring contracted during the prior month’s harsh storms.

Still, alternative metrics show there’s plenty of progress to be made before the economy fully retraces its pandemic-era losses. Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen have touted a “real” unemployment rate that includes workers that have been misclassified as having a job while they’re on pandemic-related furloughs and Americans who dropped out of the labor force since February 2020.

By Insider’s calculations, that rate fell to 8.7% in March from 9.1%. That level suggests 14.3 million Americans are still jobless.

Separately, the Bureau of Labor Statistics’ broader read of nationwide unemployment remains at worrying highs. The U-6 rate – which includes Americans employed part-time for economic reasons and workers only marginally attached to the labor force – dipped to 10.7% from 11.1%.

The rate of job growth seen in March still pushes a full recovery well into the future. Even if the US continues to add 916,000 jobs every month, it would take until January 2022 to lift employment back to levels seen before the pandemic.

“Today’s report confirms that labor market conditions are rapidly heating up but reaching broad-based and inclusive full employment will be a multi-year process,” Lydia Boussour, lead US economist at Oxford Economics, said in a note.

The White House is already teeing up its next booster for US job growth. President Joe Biden revealed a $2.3 trillion spending plan on Wednesday. The so-called American Jobs Plan includes funds for restoring roads and bridges, building affordable housing, and installing a nationwide broadband network, among other projects. The proposal should create millions of union jobs over the next eight years, according to the president.

“Now it’s time to rebuild,” Biden said during his announcement, adding: “Wall Street didn’t build this country. You, the great middle class, built this country, and unions built the middle class.”

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March began the economic reopening, but its jobs report will hint at how fast things are getting back to normal

Orange County coronavirus
The Promenade in Laguna Beach on Tuesday.

  • The March payrolls report will preview just how fast the US labor market might recover.
  • Data on Friday will likely show strong gains because of stimulus, vaccinations, and reopening.
  • Economists see the report kicking off a period of growth averaging 1 million payrolls a month.
  • See more stories on Insider’s business page.

After months of either meager gains or unexpected losses, March is poised to be a turning point for the US labor market’s recovery.

The Bureau of Labor Statistics will publish its nonfarm payrolls report for March on Friday at 8:30 a.m. ET, providing the most detailed look at how hiring fared throughout last month. The backdrop is promising. March had warmer weather, and a faster rate of vaccinations led some states to partially reopen for the first time since the winter’s dire surge in cases. Coronavirus case counts started to swing higher at the end of the month but largely stayed at lower levels.

Democrats’ $1.9 trillion stimulus plan was also approved early last month and unleashed a wave of consumer demand and aid for small businesses. Sentiment gauges surged to one-year highs, and Americans strapped in for a return to pre-pandemic norms.

Consensus estimates suggest March had the strongest payroll gains in six months. Economists surveyed by Bloomberg said they expected nonfarm payrolls to climb by 660,000, which would be nearly double the 379,000 gain seen in February. The unemployment rate is forecast to dip to 6% from 6.2%.

Some on Wall Street are even more optimistic. March’s release should kick off a “series of extremely strong jobs reports” with payroll additions averaging 950,000 a month through the second quarter, Bank of America economists led by Michelle Meyer said in a note. Unemployment will likely sink to 4.7% by the summer and sink another 0.2 percentage points by the end of 2021, they said.

“It’s hard to keep up with this economy,” the team added. “We think consumer spending is about to take off given the one-two punch of stimulus and reopening.”

UBS holds a similarly encouraging outlook. Economists led by Seth Carpenter see the sharp acceleration in economic activity driving just as strong a jump in hiring. Payroll growth is forecast to average 1 million throughout the second and third quarters as the economy reopens. With roughly 10 million jobs still lost to the pandemic, such a growth rate would recover more than half the country’s missing payrolls.

The bank also said it expected the unemployment rate to decline to 3.6% by the end of 2023, with the drop slowed by a swiftly rising rate of labor-force participation.

Data previewing the headline report showed job growth breaking out of its middling trend. The US private sector added 517,000 jobs in March, according to ADP’s monthly employment report. Though the reading landed just below the median estimate of 550,000, the increase was the largest seen since September and marked a third straight gain.

Separately, weekly jobless claims trended lower through the month, albeit at a sluggish pace. Claims rose to 719,000 last week, according to Labor Department data published Thursday. While that was an increase from the prior week’s total, claims still dropped 3.5% month over month. And the previous week’s reading was revised to 658,000 from 678,000, marking the lowest reading since the pandemic first slammed the labor market.

The Friday report will also highlight whether the recovery is evening out or if a K-shaped trend is growing worse. Unemployment rates for minorities continued to lag those for white Americans in February, and the bulk of early hires were for high-income workers. Preservation of the trend in March’s data could signal that those hit hardest by the pandemic will be some of the last to recover.

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