AP Photo/Rick Bowmer
En español | The U.S. unemployment rate fell sharply in August, to 8.4 percent from 10.2 percent, even as hiring slowed, with employers adding the fewest jobs since the coronavirus pandemic began. The unemployment rate for adults age 55 and older dropped to 7.7 percent in August, down from 8.8 percent one month earlier.
Employers added 1.4 million jobs, the Labor Department said, a slight decrease from 1.7 million in July. The U.S. economy has recovered about half of the 22 million jobs lost to the pandemic.
Friday's report added to evidence that nearly six months after the coronavirus paralyzed the country, the economy is mounting only a fitful recovery. From small businesses to hotels, restaurants, airlines and entertainment venues, a wide spectrum of companies are struggling to survive the loss of customers, with confirmed viral cases still high.
Save 25% when you join AARP and enroll in Automatic Renewal for first year. Get instant access to discounts, programs, services, and the information you need to benefit every area of your life.
Jobs recovery could be difficult to sustain
After an epic collapse in the spring, when the economy shrank at a roughly 30 percent annual rate, growth has been rebounding as states have reopened at least parts of their economies. Yet the recovery remains far from complete.
Many economists think that significant hiring may be hard to sustain because employers are operating under a cloud of uncertainty about the virus. Daily confirmed case counts have fallen from 70,000 in June to about 40,000. The decline has leveled off in the past week, and the viral caseload remains higher than it was in May and June.
As a result, activities like restaurant dining and air travel are still far below pre-pandemic levels. Most economists say a meaningful economic recovery will likely be impossible until the coronavirus is brought under control, most likely from the widespread use of a vaccine.
The jobs report coincides with growing signs that more companies are making permanent job cuts, rather than temporary furloughs. That trend could keep the unemployment rate persistently high. It is typically harder for an unemployed worker to find a job at a new company or in a new industry than to return to a previous employer.
Casino and hotel operator MGM Resorts, slammed by declines in travel and tourism, said last week that it's eliminating 18,000 jobs. The Coca-Cola Co., which derives half its sales from stadiums, theaters and other venues that have been largely shut down, is offering buyouts to 4,000 employees. Salesforce said it is cutting 1,000 jobs. Bed, Bath & Beyond will shed 2,800.
A Federal Reserve report this week, based on anecdotal reports from businesses, found “rising instances of furloughed workers being laid off permanently as demand remained soft."
Are you looking for your next job? Find it on AARP's Job Board
Some states are offering $300 per week in benefits
Roughly 29 million Americans are receiving state unemployment aid, although their total benefits, on average, have shrunk by more than half since the expiration of a $600-a-week federal supplement more than a month ago. The Trump administration has set up a program that will provide some of the unemployed with $300 a week.
But new rules and requirements will make many of the unemployed ineligible. Only people who receive at least $100 a week in state unemployment aid will qualify for the $300 federal supplement — a requirement that could exclude at least 850,000 Americans. Click here for a list of states that participate in that expanded benefits program.
The ongoing job losses and economic slump have left a rising share of Americans out of work for longer periods. From June to July, the number of people who were unemployed for 15 weeks or longer tripled to more than 6 million.
One consequence is that rising stress and anxiety are evident at therapists’ offices and in calls to mental health hotlines around the country. Calls from March through July to the U.S. government–funded Disaster Distress Helpline, which offers counseling and emotional support, surged 335 percent from the same period last year.
And half of U.S. adults reported at least some signs of depression, such as hopelessness, feelings of failure or an inability to derive pleasure from daily activities, in a survey published Wednesday in the medical journal JAMA Network Open. That amounted to twice the rate from a survey two years ago.
"Not many days go by where I don't have a couple where one partner or both are not working or furloughed,” said Todd Creager, a therapist in Southern California who treats mostly middle- to upper-middle-class adults.
What's more, the economy appears to be operating on two tracks, resulting in an uneven and unequal recovery. Manufacturers are enjoying a solid rebound in demand for cars, appliances and electronics, with factory orders nearly back to pre-pandemic levels.
In addition, wealthier and well-educated workers have been far less likely to lose jobs to the pandemic than lower-income and minority workers have, in part because of a greater ability to work from home.
The coronavirus has also reshaped much of the consumption of affluent households. While spending less on restaurants and at shops and movie theaters, they are buying new homes to gain more space or renovating their houses to serve as workplaces as well as homes.