US Economy Making a Slow But Steady Return

By Adriaan Brits Saturday, August 1, 2020

Unemployment rates slightly dipped as 4.8 million new jobs were added in May.

The June report released by the Department of Labor Statistics has revealed that the U.S. job market is making a slow but steady return to normality. This is the second month in a row that economists and the federal government saw a decline in unemployment figures, going from 14.7% to 13.3% in May. The somewhat positive news comes after the White House announced that almost 4.8 million new jobs had been added to the labor market during June.

The reports for both May and June have indicated positive figures. However, while the economy is slowly making a return to normality, it has a long way to endure before breaking even with pre-pandemic data. Additionally, economists are reluctant that the same economic growth will reflect in the July report, as highly populated cities become hotspots for the growing pandemic with social unrest still not at ease.

June Report Statistics

Many industries are struggling to return, with hospitality, food services, tourism, real estate, and entertainment being the hardest affected in the current recession. These industries have reported an increase in new employment figures, with leisure and hospitality gaining 2.1 million jobs in the previous month.

Although many citizens are slowly making a return to work, with state and the federal government loosening lockdown restrictions, retail trade added 740,000 new jobs, with education and health services behind them with 568,000 additions. It’s good to see that these figures are on the rise, compared to the previous month. Overall, these industries, including food services, are still 3.1 million payroll jobs below economic levels in February.

The labor force participation rate did make a steady incline, compared to May. Around 2.4 million participants who previously worked but weren’t actively searching for a new job was much higher than the 711,000 accounted for in the previous month.

Dismal Growth for Minority Groups

There has been a growing problem considering the equal distribution of jobs among white, black, and other minority groups. The June report showed that unemployment rates for white individuals declined to 10.1%, and black unemployment fell to 15.4%. Hispanic and Asian minorities are standing at 14.5% and 13.8%, with little change since May.

An outcry for equal distribution for employment opportunities has been made by various political groups and parties, with some stating that black unemployment is currently at its highest since the start of the economic recession.

Some are still trying to place an explanation on why these figures are still on the rise, especially for black men and women and, some stating it could be a “last hired, first fired” trend that’s affecting these figures.

What Will July’s Statistics Say?

It’s uncertain whether a positive or perhaps a sharp negative growth will be expected in July. The report, which will only be released in August, may reveal similar figures like the above mentioned, but this will only be possible if the economy is following its current trajectory.

With the rise of infected cases, some states are pausing their re-openings, or perhaps returning to stricter lockdown measures. Reopening efforts that have been ceased in some states and counties have managed to slow down the hiring rate in the last week of June. Additionally, the Labor Department revealed that almost 1.4 million individuals filed for unemployment benefits in the final days of June.

Some businesses and traders have been identified to reopen only once full lockdown measures have been lifted, which will also slow down the optimistic growth rate of the economy.

Largescale Workforce Return

A final look at the June report mat reveals some optimistic figures, but it plays against the devastating effects left by the global pandemic. Many employers are facing new challenges on both state and federal level, urging government entities to lift lockdowns, and impose lighter operating regulations.

As the economy starts to take shape again, the enthusiastic and hopeful return of million jobs will still need to face many grave challenges and obstacles to break even with pre-crisis figures.

About the Author

Headshot of author Adriaan Brits

As an analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in Advanced Analytics & Media.

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