Economy added 1.4M jobs in August as unemployment fell to 8.4% amid persistent COVID-19 outbreaks

CLOSE The coronavirus (COVID-19) is impacting the global economy and raising fears of a recession. What causes a recession and what are the signs? USA TODAYThe U.S. economy added 1.4 million jobs in August as businesses shuttered by the COVID-19 pandemic continued to reopen and bring back workers, more than offsetting a fresh wave of layoffs…

Economy added 1.4M jobs in August as unemployment fell to 8.4% amid persistent COVID-19 outbreaks

CLOSE

The coronavirus (COVID-19) is impacting the global economy and raising fears of a recession. What causes a recession and what are the signs?

USA TODAYThe U.S. economy added 1.4 million jobs in August as businesses shuttered by the COVID-19 pandemic continued to reopen and bring back workers, more than offsetting a fresh wave of layoffs by firms that have exhausted their federal loans.The unemployment rate fell sharply to 8.4% from 10.2% in July, the Labor Department said Friday.Economists surveyed by Bloomberg had estimated that 1.35 million jobs were added last month.August’s payroll gains were healthy but mark the second straight monthly slowdown in hiring after employers added a record 4.8 million positions in June and 1.8 million in July. That’s a troubling sign considering the nation has recouped slightly less than half the unprecedented 22 million jobs wiped out in early spring as states closed down nonessential businesses such as restaurants, malls and movie theaters.“The fact that employment is settling into a trend of slow, grinding improvement is a worrisome sign for the broader recovery,” economist Lydia Boussour of Oxford Economics wrote in a note to clients.The latest figures were inflated by the hiring of 238,000 temporary workers for the 2020 Census who likely will be laid off in coming months. The private sector added 1 million jobs, down substantially from 1.5 million in July. Many states have allowed businesses to reopen in phases but others, especially in the South and West, paused or reversed their relaunch plans in July and August amid coronavirus surges. Recently, cases in those hot-spot states generally have trended down but the results have been mixed. Positive test rates have stayed high in Texas and Florida and edged down just slowly in California, Goldman Sachs says.Long-term pain from COVID-19?: Coronavirus pandemic likely to leave legacy of fear and uncertainty that holds back economy for decadesAs a result, many businesses are running at just partial capacity because of lingering state restrictions and consumer fears of contagion. Many struggling firms recently have exhausted the cash they received through federal loans that were forgivable as long as they retained or rehired workers. After meeting those terms, many are letting workers go again.Last month, the number of Americans on temporary layoff fell by 3 million to 6.1 million as more laid-off workers were called back. At the same time, the number of worker
Read More From Publisher