The latest government jobs report shows people around the country are returning to work as the nation continues to reopen after months of shut down because of the COVID-19 pandemic.
Labor Department data released Aug. 7 revealed the economy added 1.8 million jobs in July, dropping the national jobless rate to 10.2%. The gains exceeded expectations of most economists according to news media reports.
Ball State economist Michael Hicks believes the latest jobs report has some positive signs but also reflects the economy still is in a recovery mode.
“The high notes were that nearly 1.8 million jobs returned over the month, as those on temporary layoff returned to work,” said Hicks, director of Ball State's Center for Business and Economic Research. “The composition of jobs was broad based, affecting most sectors (but) the worrisome elements remain the certainty of undercounting of job losers, and the large declines in labor market participation.”
Hicks said the July jobs report continues to be plagued by the measurement errors affecting the last three monthly reports. That should caution against any sweeping conclusions.
He added the employment to population ratio also is more than 5% below the level from July 2019 and more than 3.5 million workers have exited the labor force in just the past few months. Hicks said if those numbers were included in the jobs report, the unemployment rate would be 2.5% higher.
“Permanent job losses continue to increase, but temporary losses appear to be nearly fully recovered,” he said. “This means roughly 10% of those working in January remain unemployed, with no evidence of improving prospects for re-employment.”
