These 9 states are suffering from the worst unemployment rates

Daniel Fowler
August 9, 2020

Low-wage sectors led gains: payrolls at restaurants jumped by half a million, retail trade employment also increased, though at a slower pace, with more than 250,000 jobs added.

But once again the closely watched ADP data proved to be wildly out of sync with the all-important Labor Department report, which showed private payrolls rose 1.5 million. Nonetheless, government jobs are still 1.1 million lower than the February level. The May report was a surprise, announcing 2.5 million jobs when analysts were expecting a loss of about 2.5 million. Employment peaked at 152.5 million in February.

But despite the tens of millions of people who have lost their livelihood and have to depend on government aid, the extra $600 a week in unemployment benefits and the federal eviction restrictions both ended at the end of July. This is still higher than the higher rate during the so-called Great Recession of 2007-2009.

Economists believe July was probably the last month of employment gains related to the rehiring of workers after the reopening of businesses. Demand for services has been hardest hit by the respiratory illness.

"This should not be a shock", said Elise Gould, senior economist at the Economic Policy Institute in Washington. The slowdown in hiring challenges the USA stock market's expectation of a V-shaped recovery.

Over a million COVID-19 cases in Africa: AFP count
So far, it has officially registered the continent's second highest number of cases, with 95,000, including 4,630 deaths. So how likely is a second wave here? The epicentre is the commercial hub of Lagos with a population of 20 million.

While the numbers are better than expected, they show a slow climb for any job gains and there are still 12.9 million fewer jobs than before the pandemic shut down the economy. The S&P 500 index is up almost 50 percent from its March trough. The unemployment rate fell by about 1 percentage point to 10.2%, just above the peak following the 2008 financial crisis but a marked decline from nearly 15% at the height of the pandemic. As COVID-19 cases spiral, and Republicans and Democrats bicker over another stimulus package, economists see a W-shaped recovery.

Joblessness fell across all demographic groups, but remained high for Blacks, with the unemployment rate dipping to 14.6 percent from 15.4 percent in June.

According to the Department of Labor, the largest increases in initial claims for the week ending July 25 were in Virginia (+5,020), Nevada (+2,842), Missouri (+2,606), in (+2,218) and New Jersey (+2,141), while the largest decreases were in California (-44,941), Georgia (-37,329), Florida (-17,514), Louisiana (-13,568) and Texas (-11,104). But after employers shed a staggering 22 million jobs in March and April, much larger increases are needed to heal the jobs market. Average hourly earnings increased by 0.2 percent in July after a drop of 1.3 percent in June. The model that the government uses to strip out seasonal fluctuations from the data normally anticipates education workers to drop off payrolls in July.

"Many of the education-related layoffs that typically occur in July probably came earlier this year, so the July reading for government payrolls could be artificially strong", said Jim O'Sullivan, chief U.S. macro strategist at TD Securities in NY.

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