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U.S. Economy Adds 1.8 Million Jobs in July

U.S. Economy Adds 1.8 Million Jobs in July

The U.S. economy added 1.8 million jobs during the month of July, sending the unemployment rate down for the third straight month — a drop that fell in line with economist predictions and pointed to the recovery that began before infections started ticking up.

Employment at government agencies also rose in July, by about 300,000, including 215,000 working in education at the local level.

The July gains were driven by hiring in sectors that had been hard hit by the pandemic, such as leisure and hospitality, which increased by 592,000 jobs — about a third of the total monthly gain. Employment at restaurants, bars and other food and drink services rose by 502,000.

Amusements, gambling and recreation added another 100,000.

The unemployment rate fell to 10.2 percent.The job additions were sizable, but there are signs that the labor market recovery has cooled. In May, the first month of gains after the pandemic sent the economy into a tailspin, 2.7 million people were added back to payrolls. In June, employment surged by 4.8 million.

The number of coronavirus cases began rising in June, surging to around 70,000 cases diagnosed in one day by mid-July — more than twice as much its previous peak. Those infections touched off a wave of closures, as some employers paused hiring or delayed planned rehirings, and in some cases, laid off workers for a second time.

The figures are drawn from a weeklong survey that takes place the week of the 12th each month — the middle of July. Because of the lag, economists urged caution about interpreting them, noting troubling economic signs have emerged in more recent weeks.

Data from payroll processing company ADP showed a significant slowdown in hiring during July. The Federal Reserve Bank of St. Louis pointed to indicators this week from the scheduling company Homebase that showed that the recovery in employment that took place in May and June had begun to halt as a result of the spike on coronavirus infections. That data showed a strong correlation between states with larger infections and the slowdown in the labor market’s recovery.

Two key federal initiatives, which many economists credit with keeping the economy afloat during the crisis, have ended: the extra $600 in unemployment insurance, which many workers say is the only thing standing in between them and financial ruin, and the Paycheck Protection Program, the $660 billion grant program to help keep small businesses solvent.

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