The United States economy added half as many jobs as expected during the month of July.
According to a report from ADP Research Institute and Moody’s Analytics, private sector employment growth saw a substantial dip from its June levels.
Employers added 330,000 positions for the month, a sharp deceleration from the downwardly revised 680,000 in June. It’s also well below the 653,000 Dow Jones estimate. June’s final total fell from the initial estimate of 692,000.
Markets fell after the report, with Dow futures down nearly 120 points and most government bond yields pulling back.
The report explains that leisure and hospitality — which added 139,000 positions — drove much of July’s growth. Franchise employment also rose by 105,400.
“The labor market recovery continues to exhibit uneven progress, but progress nonetheless,” said ADP chief economist Nela Richardson as quoted by CNBC. “July payroll data reports a marked slowdown from the second quarter pace in jobs growth.”
“Bottlenecks in hiring continue to hold back stronger gains, particularly in light of new COVID-19 concerns tied to viral variants,” she added. “These barriers should ebb in coming months, with stronger monthly gains ahead as a result.”
The report comes as the United States labor market continues to experience distortions following COVID-19 and the lockdown-induced recession.
As The Daily Wire has previously reported, President Biden’s American Rescue Plan extended $300-per-month federal unemployment insurance payments through September. A recent Morning Consult poll found that 13% of respondents said that they had turned down job offers while unemployed because they “receive enough money from unemployment insurance without having to work.” Since 14.1 million adults were receiving benefits at the time, Morning Consult concluded that roughly 1.8 million Americans have turned down jobs due to the handouts.
Twenty-six states — all but one of which are led by Republicans — have therefore opted out of the program, citing concerns from local small businessowners about their difficulties in hiring new workers despite a record number of job openings.
The Federal Reserve’s most recent semiannual report to Congress pointed to the federal unemployment handouts as a leading cause of labor market distortions:
With economic activity rebounding, labor demand rose briskly in the spring, while the supply of labor struggled to keep up. Employers reported widespread hiring difficulties, job openings jumped to about 30 percent above the average level for 2019, and the ratio of job openings to job seekers surged… enhanced unemployment benefits have allowed potential workers to be more selective and reduce the intensity of their job search.
Citizens in states that have prematurely opted to exit the enhanced payment program — such as Florida, Texas, Indiana, and Maryland — are now filing suit against their governors in the interest of continuing to receive handouts.
Author : Ben Zeisloft
Source : Daily Wire : U.S. Economy Added Only Half As Many Jobs As Expected In July