After the corona shock and mass unemployment in the spring, the number of unemployed in the United States continues to decline: Although more than a million US citizens applied for unemployment benefits again in July, more than 1.7 million new jobs were also created .
The US labor market recovered somewhat more strongly than expected in July. 1.763 million jobs were created outside of agriculture, the government announced. Economists had only expected 1.6 million. The unemployment rate determined in a separate survey fell to 10.2 percent. A decline to 10.5 percent was expected here after 11.1 percent in June.
The labor market is making good ground again after the waves of layoffs that turned full employment into mass unemployment in the spring of the Corona crisis. The unemployment rate had risen to over 14 percent in April due to the Corona crisis, which shut down large parts of economic life. In May it fell to 13.3 percent, then surprisingly significantly to 11.1 percent in June. Due to the usual delay in collecting data, the rate for July only shows the situation on the labor market until the middle of the month.
Despite the emerging economic recovery in the USA, the situation on the labor market remains very tense. In the week up to and including August 1, around 1.2 million people applied for unemployment benefits, as data from Thursday showed. In the previous weeks, too, the number of new applications was well over a million.
Corona aid is running out
The applications reflect the short-term development of the labor market and show that the world's largest economy is still in a serious crisis. Before the pandemic, the number of new applications had rarely risen above 100,000. In view of the rapid increase in new infections in the states in the south and west of the country – in which around a third of the population lives – the economic recovery has recently stalled again.
Persistence of unemployment at a high level would be particularly worrying because an additional federal unemployment benefit of $ 600 per week from a corona aid package from March expired at the end of July. The loss of aid is likely to hit millions of Americans hard and put a strain on the economy as a whole – especially since consumption accounts for a large part of economic output. Democrats, Republicans and the government wanted to negotiate another stimulus package later in the day, which should also renew the generous unemployment benefits.
US President Donald Trump, who is running for a second term in November, is hoping for a quick economic recovery. Most analysts are, however, much more skeptical about this because of the ongoing pandemic. The US Federal Reserve no longer expects a very rapid recovery due to the pandemic.