Washington D.C. [USA], July 18 (ANI): The US labour market recovery is losing momentum, as a new wave of coronavirus infections causes heightened employer uncertainty and consumer caution, The WallStreet Journal reported.
Job openings in July are down from last month across the United States, and Google searches for "file for unemployment" are creeping up. Growth in worker hours is waning at small businesses after several weeks of gains.
The slowdown across industries and states comes as the Congress ponders on whether to extend USD 600 a week, as federal unemployment benefits, that some 25 million workers are expected to receive by this month as part of the coronavirus relief package.
Many economists opined to the Journal that the benefits--totalling about USD 15 billion a week--have helped offset the impact of the pandemic on the economy. The funds, which pay many lower-wage workers more than if they were on the job, is discouraging people from returning to work, critics further said.
"This recent slowdown in the economy is being driven by the economic uncertainty associated with the growing outbreaks rather than just the direct impact of the outbreaks themselves," said Daniel Zhao, economist at job site Glassdoor, adding that "uncertainty is hitting all players in the economy including businesses, workers and consumers."
Job postings declined in all 50 states and Washington, D.C., in the past two weeks, according to Glassdoor. However, job-opening decreases were less steep in states with sharp rises in virus infections, including Florida, Texas and Arizona, possibly reflecting broader reopenings in those states.
Businesses were reopening and recalling workers in May and June, helping the country's economy to recover 7.5 million jobs and consumer spending to rebound in those months, in part due to a rebound in hospitality and retail hiring. Economists too expected growth to continue in July, but at a slower pace because of increased infections.
Still, June employment was down by about 15 million jobs compared with February, the month before the pandemic hit, as per the Labour Department data.
New applications for unemployment benefits remain at historically high levels and held steady at 1.3 million last week, a further indication that the rise in coronavirus cases is hampering the labour-market recovery.
Furthermore, businesses that were just regaining footing after months-long closures tied to the pandemic are facing new setbacks.
Economists suggest that consumers need to feel confident the virus is contained before economic activity can return to levels seen before the pandemic. Business owners and industry representatives say the longer the shutdowns drag on, the harder it will be for companies to survive. (ANI)