spot_img
- Advertisement -
BusinessJuly Jobs Report: Live Updates and Analysis

July Jobs Report: Live Updates and Analysis

-

- Advertisment -

[ad_1]

Daily Business Briefing

Aug. 6, 2021, 9:56 a.m. ET

Aug. 6, 2021, 9:56 a.m. ET

April

June

Sept.

Jan. ’21

April

–5.7 million jobs since Feb. 2020

+16.7 million since April 2020

+943,000
in July

152.5 million jobs in February 2020

The American economy roared into midsummer with a strong gain in hiring, but there are questions about its ability to maintain that momentum as the Delta variant of the coronavirus causes growing concern.

Employers added 943,000 jobs in July, the Labor Department reported Friday, but the data was collected in the first half of the month, before variant-related cases exploded in many parts of the country.

While the economy and job growth overall have been strong in recent months, experts fear that the variant’s spread could undermine those gains if new restrictions become necessary. Already, some events have been canceled, and many companies have pulled back from plans for employees to return to the office in September.

Still, with schools planning to reopen, at least for now, and Americans continuing to dine out and travel, the economy’s expansion remained on track last month. Some experts foresee a slight cooling on the horizon, but most think unemployment will keep falling as the labor market recovers the ground lost in the pandemic.

“Sectors tied to the reopening of the labor market are leading the way, giving some hope that these gains can continue in the months ahead,” said Nick Bunker, economic research director at Indeed Hiring Lab. “However, the Delta variant does pose a risk to the pace of progress.”

It was the best monthly performance since August 2020, and underscored how far the recovery has come, at least until the Delta variant appeared on the scene.

The unemployment rate fell to 5.4 percent, compared with 5.9 percent in June. Before the report, the consensus of economists polled by Bloomberg forecast a gain of 858,000 jobs, with the unemployment rate dipping to 5.7 percent.

“This is a great report, very solid in terms of job growth, wage growth and the decline in the unemployment rate,” said Gus Faucher, chief economist at PNC Financial Services in Pittsburgh. “I don’t see the Delta variant derailing the recovery.”

5

10

15%

Jan. ’20

Jan. ’21

The education arena, often a laggard in July as schools close and teachers go off the payroll, was a leader last month. Instead of letting teachers go as they have in the past, schools kept more workers on the payroll, creating a larger seasonal adjustment upward in the number of teaching jobs.

Local government added 221,000 education jobs, after a jump in June, and 40,000 jobs were added in private education. Leisure and hospitality businesses, which were hit hard by lockdowns last year, recovered further, adding 380,000 jobs. That included 253,000 in food and drinking establishments, along with hiring gains in lodging and in arts, entertainment and recreation.

Manufacturing and construction showed more modest increases, hampered by higher goods prices and a shortage of components like semiconductors. Employment in professional and business services jumped by 60,000, a sign that the white-collar sector is on the upswing.

What’s more, upward revisions for May and June rounded out the positive picture, with the Bureau of Labor Statistics lifting the gain for May by 31,000 and the increase in June by 88,000.

Construction

–227,000 since February 2020

7.6 million jobs in Feb. 2020

Business and professional services

State and local government

Leisure and hospitality

–1 mil.

–2

–3

–4

–5

–6

–7

–8

–1.7 million

16.9 million

“Business is unbelievable,” said Tom Gimbel, chief executive of LaSalle Network, a recruiting and staffing firm in Chicago. “Companies are continuing to hire salespeople in numbers that I’ve never seen. It shows me that companies are very optimistic about the future.”

“We’re seeing demand for senior people, but it’s not crazy,” he added. “The huge demand is entry to midlevel, with salaries ranging from $45,000 to $90,000. It’s the rebirth of the middle manager.”

Despite the hiring gains, many managers report difficulty in finding applicants for open positions. Jeanine Lisa Klotzkin manages an outpatient addiction treatment center in White Plains, N.Y., and has had only limited success in her search for addiction counselors.

“Normally, we’d have dozens of candidates,” she said. But six weeks after posting an online job ad, her clinic has received four applications. The positions pay $50,000 to $63,000 a year, said Ms. Klotzkin, who added: “These aren’t low-wage jobs. I don’t know where the people went.”

Federal Reserve officials are trying to decide what comes next for monetary policy, and Friday’s jobs report gave them a positive sign that the economy is moving toward their goals.

The July employment report — which showed that the country added 943,000 jobs as wages rose and more people in their prime working years joined the labor market — is likely to increase the central bank’s confidence that the economy is swiftly healing.

+2

+4

+6

+8

+10

+12

+14%

2019

2020

2021

The Fed has held interest rates near zero since March 2020 and is buying a lot of bonds each month, policies meant to keep near-term and longer-term interest rates low, fueling borrowing and spending. As officials consider when and how to slow their bond buying, the first step toward reducing their support for the economy, they are closely attuned to job growth.

Fed policymakers have two main goals: They want inflation that comes in at a slow but steady 2 percent yearly rate on average over time, and they want to guide the economy toward maximum employment. While prices have moved sharply higher this year, central bankers have been looking for more progress on the jobs front.

The solid employment gains in July are probably right in line with what they are hoping to see in order to put them on track for announcing a plan to slow bond-buying in the coming months. One official, Christopher J. Waller, a member of the Fed’s Board of Governors, recently signaled that he is looking for and expecting job gains around 800,000 to one million per month.

Jerome H. Powell, the Fed chair, has said the central bank is monitoring factors like the overall unemployment rate, the jobless rate for different demographic groups, labor force participation rates and wage data to get a holistic picture of whether the economy is moving back to full employment.

“We have some ground to cover on the labor market side,” Mr. Powell said in late July, explaining that the job situation needed to heal more before the economy would have shown enough progress for the Fed to announce that it would slow bond buying. “I would want to see some strong job numbers.”

Here are a few of those broader metrics of labor market strength in July:

  • The unemployment rate for Black workers fell to 8.2 percent from 9.2 percent, and that for Hispanic workers fell to 6.6 percent from 7.4 percent. Minority groups often see joblessness spike highest, and then remain stubbornly elevated, during and after downturns. Improvement along those metrics can be a sign that the labor market improvement is reaching a broad swath of people.

Hispanic men

+0.2% since Feb. 2020

15.9 million employed in Feb. 2020

  • The participation rate for workers in their prime working-age years, which is defined as 25 to 54, rose to 81.8 percent from 81.7 percent. The Fed is hoping to see that figure climb back toward its February 2020 level, which was 82.9 percent.

  • Average hourly earnings rose by 4 percent from a year earlier, slightly more than the 3.9 percent expected in a Bloomberg survey, and wages for nonsupervisory and production workers — which can give a clearer reading on what’s happening for typical workers — have climbed by 4.7 percent over the past year. Those wage data have been distorted by who has and hasn’t returned to the job market over the course of the pandemic, but they are pointed in the right direction, from the Fed’s perspective.

  • Yields on government bonds rose on Friday after the Labor Department said U.S. employers added 943,000 jobs in July, beating expectations of a gain of 870,000 positions.

  • The government also revised higher the data for two previous months by 119,000 jobs. The unemployment rate dropped to 5.4 percent from 5.9 percent in June.

  • That said, the data was collected in the first half of July, before variant-related cases surged and businesses and states reintroduced mask mandates and other restrictions.

  • Yields on 10-year U.S. Treasury notes climbed to 1.28 percent, from 1.22 percent. Signs of strength in the economy could keep the Federal Reserve on track to start to pull back its support for the economy — namely its purchases of government bonds.

  • The report “highlights a roaring recovery in the labor market and increases the chances of the Fed tapering their asset purchases sooner rather than later,” Mike Bell, a strategist at JPMorgan Asset Management, wrote in a note. “We expect this to be the start of a sustained move higher in treasury yields over the rest of the year.”

  • Gains in the stock market were muted. The S&P 500 was slightly higher in early trading Friday.

  • European stock indexes were mostly higher. The Euro Stoxx 50, made up of the eurozone’s largest public companies, rose 0.4 percent.

Brianna McCain with her daughters, Lincoln Manning, 2, right, and Nyla Manning, 6, at their home in Portland, Ore. She can’t take a job outside the home until school and child care open, she said.
Credit…Leah Nash for The New York Times

Many parents of young children — those under 12 who cannot yet be vaccinated — say they’re unable to return to workplaces or apply for new jobs as long as there is uncertainty about when their children can safely return to full-time school or child care, reports Claire Cain Miller, a correspondent covering gender, families and the future of work for The Upshot.

“You cannot divorce the child care issue and the pandemic,” said AnnElizabeth Konkel, an economist at the Indeed Hiring Lab. “It’s important that we don’t forget about the workers who are wrestling with this day in and day out.”

  • In an Indeed survey this summer, a significant share of those looking for a job said they were waiting for schools to open. Among those who were unemployed but not urgently looking, nearly one-fifth said care responsibilities were the reason. Those without college degrees were more likely to cite such a reason — and more likely to be unable to work from home or to afford nannies.

  • Many parents of preschool-aged children face a shortage of child care openings. One-third of child care centers never reopened, research shows; those that are still closed disproportionately served Asian, Latino and Black families. Those that opened are operating at 70 percent capacity, on average. They have struggled to hire qualified teachers; must keep classes small to limit exposure to the virus; and have raised prices to cover new health and cleaning measures.

  • Fall is looking increasingly uncertain. Some workplaces have paused reopening plans because of Delta, and parents worry schools may follow. Certain companies, including McDonald’s, and states, like Illinois, are trying to get ahead of this by offering child care benefits to help parents get back to work. According to Bright Horizons, the employer-based child care company, 75 companies have started offering backup child care this calendar year and others, like PayPal, have extended their pandemic expanded benefits through this year.

A restaurant in Minneapolis last month. Many economists will watch hiring categories like leisure and hospitality this month for any sign that people are surging back to work as benefits end.
Credit…Tim Gruber for The New York Times

Economists on Wall Street and in Washington will be parsing employment data Friday for any hint at whether workers are prodded back into the labor market as federal unemployment insurance benefits are cut off.

This will be the first jobs report that may reflect an increase in labor supply and hiring from the loss of benefits, because about half of the states had ended a $300-a-week federal supplement by the time of data collection. That money expires at a federal level on Sept. 6, but some states — all but one led by Republicans — began to curtail the federally funded support in mid-June, at the tail end of that month’s labor market survey.

Friday’s report will offer only high-level numbers, figures on industries and data on demographic groups, so analysts may have to wait until state-by-state data are released in mid-August to compare the places that cut off the $300 supplement with those retaining it.

Many businesses have blamed generous unemployment benefits for inducing workers to remain out of work. That is why many states ended the benefit early. The Biden administration has been loath to say the added benefit discouraged work, but is allowing it to lapse. The infrastructure plan being considered by the Senate would be funded in part by unused appropriations for jobless benefits.

But it’s unclear to what extent the aid cutoff will prod people back into the job market. It has been difficult to judge from up-to-date data — like jobless claims — whether more workers are searching for positions as the help ends.

“So far, the claims data don’t show overwhelmingly clear evidence that there is a meaningful reaction in the labor market when states have ended the pandemic-related unemployment insurance programs,” Daniel Silver at J.P. Morgan wrote in a recent note. He added that in some places cutting off federal aid, continuing claims had fallen “more noticeably” than elsewhere.

Analysts at Goldman Sachs found little difference in the June jobs data between states that ended federal jobless benefits early and those that did not. While the cutoff in federal benefits by some states had just begun when the June survey was conducted, the prospective loss of income might have nudged workers to search for jobs.

“While workers in these states knew the policy was ending soon and could have responded pre-emptively, the full effect of expiration on official employment measures should not be fully visible until the July report,” Ronnie Walker, a Goldman economist, wrote in a research note on July 17. At the time, Goldman thought the cutoff might add as many as 150,000 jobs to the data being released Friday, based on early state-level figures.

Some economists are skeptical that the loss of benefits will greatly affect the labor market.

Deutsche Bank analysts have said the role of unemployment insurance benefits in discouraging people from returning to work seems limited.

“There is limited evidence that UI benefits have been a primary factor weighing on employment,” Matthew Luzzetti and his colleagues wrote in a recent analysis. They pointed out that job growth had been strong in low-wage sectors where employers should be competing with the benefit, and that those sectors had similar patterns in job openings relative to new hires that other sectors had shown.

Mr. Luzzetti said in an email that he did not expect the early cutoff of federal benefits in some states to have a meaningful effect on the July jobs figures.

And Luke Tilley, Wilmington Trust’s chief economist, wrote in a research note that employment numbers released by the payroll and data company ADP on Wednesday — which showed disappointing job growth — suggested that “the expiry of federal unemployment insurance benefits (which has now occurred in nearly 50 percent of states) will not be an immediate panacea for labor shortages.”

While ADP figures are often out of line with the monthly Labor Department numbers, and may be especially so this time because of seasonal adjustments, they can signal direction.

Still, many economists will watch hiring categories like leisure and hospitality this month for any sign that people are surging back to work as benefits end.

Luke Pardue, economist at the payroll platform Gusto, found in a recent analysis of the company’s data that hiring in small service businesses hadn’t been helped overall in states that ended federal benefits early — though it may have tilted toward older workers and away from teenagers.

Zillow says more women have applied since it announced that most employees could work from home permanently. “We’re going to do everything we can to actively move away from the way we used to work,” said Meghan Reibstein, Zillow’s vice president for organizational operations.
Credit…Jack Flame Sorokin for The New York Times

Hybrid work could introduce a new type of inequality to the workplace: Bias against remote workers could become a new obstacle to making workplaces more diverse and inclusive, say management experts and corporate executives themselves, Sarah Kessler reports for DealBook.

Though most evidence that remote workers are at a disadvantage is anecdotal, at least one study, led by researchers at Stanford University, suggests they are less likely to be promoted than their in-office peers. In the experiment, researchers randomly assigned workers at a large travel agency in Shanghai to work remotely or in the office for nine months. Though the remote workers were 13 percent more productive, putting in more hours and making more calls per minute, they were promoted about half as often as their in-office peers.

“They can get forgotten,” said Nicholas Bloom, a professor of economics at Stanford and one of the study’s authors.

The result is troubling partly because the desire to work remotely isn’t evenly distributed, Dr. Bloom said. He and his research team conducted monthly surveys about remote work since May last year. As of March this year, among college-educated parents of young children, women have said they want to work from home full time around 50 percent more often than men do.

Credit…Justin Sullivan/Getty Images

United Airlines said on Friday that it would require all U.S. employees to be vaccinated against the coronavirus starting this fall. It was the first major airline to establish such a mandate and the latest in a small but growing number of businesses to do so.

“We have no greater responsibility to you and your colleagues than to ensure your safety when you’re at work, and the facts are crystal clear: Everyone is safer when everyone is vaccinated,” Scott Kirby, the airline’s chief executive, and Brett Hart, its president, said in a memo to their staff.

Employees will be required to upload proof of vaccination within five weeks of the Federal Drug Administration fully approving a vaccine or by Oct. 25, whichever comes first. Those who provide proof by Sept. 20 will receive a full day’s pay, excluding pilots and flight attendants who have already received a union-negotiated bonus for getting vaccinated. So far, about 90 percent of United’s pilots and 80 percent of its flight attendants have been vaccinated, the airline said.

Employees who fail to comply with the new policy will be fired. And while United will allow exceptions for religious or medical reasons, it will require documentation.

Mr. Kirby first floated the idea of a mandate at an internal town hall in January, saying that United would be “amongst the first wave of companies” to require vaccination.

Delta Air Lines requires new employees to be vaccinated, but existing employees are exempt. American Airlines is “not putting mandates in place” for employees or customers, its chief executive, Doug Parker, said in an interview with the New York Times columnist Kara Swisher.

Airlines have generally dismissed the idea of mandates for customers. Mr. Parker said in the interview that doing so would create “enormous delays.” Delta’s chief executive, Ed Bastian, said on CNBC this week that it would be “very difficult” to require customers to receive a vaccine that hasn’t yet been fully federally approved.

  • CNN said on Thursday that it had fired three employees who violated its coronavirus safety protocols by going to the office unvaccinated, one of the first known examples of a major American corporation’s terminating workers for ignoring a workplace vaccination mandate.

    The network has been relying on an honor system rather than requiring proof of vaccination status. “Let me be clear — we have a zero-tolerance policy on this,” CNN’s president, Jeff Zucker, wrote in an internal memo on Thursday.

  • Amazon told its corporate employees that they did not need to return to their offices until Jan. 3, pushing back a deadline that had been set for early September.

    The notification to employees did not indicate any changes to Amazon’s vaccination policy, which encourages but does not mandate vaccines, or its mask policy, which allows workers at both its corporate offices and warehouses to be unmasked if they provide proof of vaccination.

  • BlackRock, the world’s largest money manager, and Wells Fargo, one of the nation’s largest banks, said in internal memos to U.S. employees that they would postpone their mandatory return plans until early October, from September.

    When BlackRock employees return to their offices in larger numbers, the money manager will introduce a hybrid policy whereby employees can work three days per week in the office and two from a remote location.

Huawei phones on display in Hangzhou, China. For the first time in over seven years, Huawei was not one of China’s five best-selling phone brands, quarterly data showed.
Credit…Agence France-Presse — Getty Images

Sales are falling fast at Huawei, the Chinese tech titan that American officials have deemed a national security threat and sought doggedly to undermine.

The company said on Friday that its shrinking smartphone business caused overall revenue for the first half of the year to slide by nearly 30 percent from last year, to about $50 billion. Its net profit margin, however, was 9.8 percent, up from 9.2 percent last year.

As a closely held company, Huawei is not legally obligated to report its earnings. It publishes only a small selection of financial results, and not on a quarterly basis.

“Our aim is to survive, and to do so sustainably,” Eric Xu, one of Huawei’s deputy chairmen, said in a statement on Friday.

Over the past few years, Huawei’s ability to work with the international computer chip industry has narrowed because of a series of rules that were imposed by the Trump administration. It has become extremely hard for the company to produce the cutting-edge phones that had made it a global Goliath not long ago. Huawei denies that its products threaten any nation’s security.

The U.S. sanctions also prevent Huawei devices from running Google’s most popular apps. That has been driving away customers outside of China for awhile.

But even within China, where many Google apps have long been blocked, Huawei’s handset business is sinking quickly. In the latest quarter, for the first time in over seven years, Huawei was not one of China’s five best-selling phone brands, according to the market research firm Canalys. The top five, in order, were Vivo, Oppo, Xiaomi, Apple and Honor.

Honor had been a Huawei brand until it was spun out late last year to put it out of reach of the U.S. restrictions. That contributed to the drop in Huawei’s smartphone revenue, a company spokesman said.

A vintage Super Mario Bros. video game has sold for $2 million, a collectibles company announced Friday, breaking the record for the most expensive video game sale that was set just weeks ago.

The 1985 game, made for Nintendo’s original console, has never been opened — a rarity for old video games, said Rob Petrozzo, one of the founders of the collectibles site, Rally. An anonymous buyer purchased it, he said.

Demand for collectibles has surged during the pandemic, along with many other forms of investment, as people stuck at home look for ways to spend their money. People have spent millions of dollars for pieces of digital artwork — known as nonfungible tokens — like internet memes and video highlights of National Basketball Association players. Physical goods, including old cars and sports cards, have soared in value over the last year, too.

But video games are still a nascent market, Mr. Petrozzo said. Interest in buying old games has picked up some in recent years, but many vintage games have been opened and played, causing them to lose value, he said, and investors are often intimidated from entering an industry they’re unfamiliar with.

Recently, though, a pair of head-turning sales have jolted interest in the gaming space. A 1987 Legend of Zelda game cartridge that sold for $870,000 in early July was considered a record, until a 1996 Super Mario 64 game went for $1.56 million just days later.

“I think that we’re starting to see the natural progression of ‘What else? What are the things that have appreciated in value from my childhood that have that nostalgia?’” Mr. Petrozzo said.

The past two record sales were made via an auction. Rally uses a different system. The company buys physical collectibles, like comic books and cars, and invites people to invest in shares of the individual items as they would a stock. When someone makes an offer to buy one of the items outright, Rally takes that offer to the investors, who vote on whether to sell and cash out their share of the profits, or to decline.

Rally bought the Super Mario Bros. game for $140,000 in April 2020, and investors shot down a $300,000 offer for it last year. The $2 million offer from the anonymous buyer — a collector who is “making big bets in the video game space” — won the approval of three-fourths of the game’s investors, Mr. Petrozzo said.

Ed Converse, a graduate law student from Green Bay, Wis., invested $100 in the game last year and said he was netting $950 from the sale.

“I’m very excited about it,” Mr. Converse, 32, said. “It’s pretty crazy to think that I made an investment in it because of the nostalgia of playing the video game when I was a kid and now it’s selling for $2 million.”

Mr. Petrozzo thought that the splashy sale could be just the beginning for gaming collectors.

“In my opinion, it hasn’t reached the masses,” he said. “You’ll start to see a lot more people paying attention and doing research.”

  • Levi Strauss & Co. said on Thursday that it agreed to buy the Beyond Yoga brand, highlighting the powerful lure of athleisure in the modern day. The company said that it expected the deal to add more than $100 million to net sales in fiscal 2022. Terms of the deal were not disclosed.

  • The White House said on Thursday that it was aiming for half of all new vehicles sold by 2030 to be electric powered, portraying the shift to battery power as essential to keep pace with China and to fight climate change.

    President Biden announced the target on Thursday as part of a plan that will also include construction of a nationwide network of charging stations, financial incentives for consumers to buy electric cars, and financial aid for carmakers and suppliers to retool factories for electric vehicles.

Senator Elizabeth Warren is among those calling for stricter regulation of digital assets.
Credit…Alex Wong/Getty Images

Washington has been preoccupied by infrastructure this week, but officials still found time to take aim at the cryptocurrency industry. It’s a sign of the industry’s increasing prominence, the DealBook newsletter reports.

Gary Gensler, the chair of the Securities and Exchange Commission, Senator Elizabeth Warren, Democrat of Massachusetts, and others have been calling for stricter regulation of digital assets. Cracking down on cryptocurrency also came up in negotiations over the infrastructure bill, which includes a provision to raise about $30 billion in taxes on crypto transactions over a decade.

On that front, the crypto industry’s growing lobby rallied to press senators for an amendment to clarify the provision, showing its sway. The venture capitalists at Andreessen Horowitz wrote to Senate leaders, calling the clause “overly broad” and suggesting a lawsuit looms if the language isn’t changed. Brian Armstrong, the chief executive of the cryptocurrency exchange Coinbase, protested in a Twitter thread. And lobbyists worked behind the scenes with a bipartisan group of senators on an amendment that is now set to be considered before the bill goes to a vote.

This skirmish is a preview of bigger battles to come. In addition to Mr. Gensler and Ms. Warren, the leaders of the House Financial Services Committee and the Senate Banking Committee have called for sweeping new rules for digital assets and tougher enforcement. Representative Donald Beyer, Democrat of Virginia, recently introduced a comprehensive bill on digital assets that industry groups told DealBook they haven’t had time to analyze yet because of the infrastructure proposal fight. After mounting such resistance to one provision in a 2,700-page bill, more protracted fights lie ahead, which will test the strength of the crypto industry and may create rifts among officials.

At the Federal Reserve, policymakers appear increasingly conflicted over digital dollars. Recent speeches show that they have yet to align on the costs and benefits of a state-issued digital currency, even as counterparts in China, parts of Europe and smaller economies like the Bahamas have or are working on one. The Fed plans to release a report on the topic later this summer, which is sure to generate debate.



[ad_2]

Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Health

Yankees and Mets Clash in Subway Series on 9/11 Anniversary

Within the past month, the Yankees managed to win 13 straight games but also endure losing streaks of...

G.O.P. Seethes at Biden Mandate, Even in States Requiring Other Vaccines

Experts in public health law agree that Mr. Biden is on solid legal footing, because his actions are...

Smart Glasses Made Google Look Dumb. Now Facebook Is Giving Them a Try.

SAN FRANCISCO — Last Saturday, after a three-mile hike through the Presidio, I stood in a throng of...
- Advertisement -

Must read

Yankees and Mets Clash in Subway Series on 9/11 Anniversary

Within the past month, the Yankees managed to...

G.O.P. Seethes at Biden Mandate, Even in States Requiring Other Vaccines

Experts in public health law agree that Mr....

You might also likeRELATED
Recommended to you