The headline unemployment rate dropped to 10.2% in July, a modest improvement from June’s rate of 11.1%. The total unemployment rate, which includes all persons marginally attached to the labor force, plus total employed part time for economic reasons, dropped to 16.5% from 18% in June. Over 1.8 million jobs were added back to the economy. The largest job gains were recorded in the leisure and hospitality, government and retail sectors – sectors that saw sizable employment declines at the start of the pandemic. The number of permanently unemployed continues to rise as businesses fold under the weight of continued reduced economic activity despite generous government support. In July, 71% of unemployed workers had been laid off temporarily, while 22% faced permanent job loss. Compare this to June when 74% of job loss was temporary and 20% were permanent.
Higher-frequency jobs data shows that more improvements are coming. For the week ending August 1, initial jobless claims fell by 240,000, to 1.2 million, the lowest level so far during this pandemic period. Nonetheless, lenders have been acting in anticipation of a credit fallout. In addition to higher loss allowances, banks have tightened lending standards across most consumer products, which may make credit less accessible and more expensive for consumers going forward.
Headline unemployment improves modestly in July to 10.2%;
Total unemployment rate stands at 16.5%
Unemployment due to permanent job loss comprise 22%
of unemployed versus 20% in June
For week of Aug 1, initial jobless claims fall 240,000 to new
pandemic-period low of 1.2 million