Total nonfarm payroll employment in the U.S. rose by 1.8 million in July, sending the unemployment rate down by 0.9 of a percentage point to 10.2%, with notable gains in retail, the U.S. Labor Department's Bureau of Labor Statistics reported Friday.
July's gains are somewhat heartening, considering that the pandemic is still far from over, and several businesses, including in retail, haven't yet returned to their normal capacity. But they failed to make up for the declines of the last few months. Since February, the unemployment rate is up by 6.7 percentage points and the number of unemployed workers has increased by 10.6 million, according to the report.
"Payrolls remain 12.9 million below pre-pandemic levels, a bigger hole than at even the worst point in the aftermath of the Great Recession," Wells Fargo Senior Economist Sarah House said in emailed comments, noting that further gains will be even slower. "The initial bounce from widespread re-openings is now behind us. Further improvement will occur in fits and starts and depends on the course of the virus."
The retail industry saw its own improvements, similarly limited. In July, retail added 258,000 jobs, but the industry's employment level is 913,000 lower than in February. Nearly half of the industry's employment gains were in clothing and accessories stores (121,000), while general merchandise stores (including warehouse clubs and supercenters) lost 64,000 jobs, the government said.
Employment in transportation and warehousing — of growing interest in retail due to the rise of e-commerce — rose by 38,000 in July, following an increase of 87,000 in June. But employment in those areas remains down by 470,000, after a January peak, per the report.
Indeed, businesses continued deep cuts to their payrolls in July. U.S. employers cut 262,649 jobs in the period, the year's third-highest total of the year, behind April (671,129) and May (397,016), according to outplacement and business and executive coaching firm Challenger, Gray & Christmas. That's 576% higher than a year ago and 54% higher than last month, according to the report. The total number of job cuts in 2020 so far is 1,847,696, — and retailers, having cut 163,112 or nearly 200% more than last year, are behind only entertainment and leisure companies (including restaurants, hotels, bars and amusement parks) in slashing their workforces, the firm said.
Moreover, any improvement to the jobs picture could be undercut by the government's failure so far to renew the pandemic-related unemployment relief, which several analysts in recent weeks flagged as crucial to boosting retail sales. Those temporary benefits ran out last week, and at press time Congress and the White House remained at an impasse over any renewal.
