- The US economy added 1,763,000 jobs in July, about as expected.
- The unemployment rate fell from 11.1% to 10.2%, better than expectations of 10.6%.
- Job gains were widespread, however, the normal seasonal adjustments are out of synch with the new environment.
- For example, this month there were 301k jobs government jobs created, the second-highest ever. Normal seasonal adjustments presume that teachers leave the workforce in June, but this year they left earlier causing an artificially large gain in July.
- The bigger story is that the economy lost a total of -22,160k jobs in March and April, and has only regained 9,279k jobs, or 41.9% since then.
- And of those 9,279 jobs regained, leisure and hospitality accounted for 3,978 of them or 43% of the total. Given the likelihood of a resurgence of COVID-19 in the fall, it seems unlikely that this will continue to be the case.
- Similarly, retail has accounted for 16% of all jobs regained, and those are likely at risk as well.
- But the even bigger picture is that of the 9,279k jobs regained, almost all of them, 95.2% were people returning from temporary layoffs.