U.S. job growth likely slowed further in August as financial assistance from the government ran out, threatening the economy's recovery from the COVID-19 recession.
"The pandemic has really torn our economic and social fabric," said Sung Won Sohn, a finance and economics professor at Loyola Marymount University in Los Angeles."The ending of the fiscal stimulus has not helped the situation." President Donald Trump, who is trailing in polls behind former Vice President Joe Biden, the Democratic Party nominee, is likely to tout the continued job gains as a sign that the economy is improving after suffering its biggest shock in at least 73 years in the second quarter.
A report this week from the Federal Reserve based on information collected from the U.S. central bank's contacts on or before Aug. 24 showed an increase in employment. The Fed, however, noted that"some districts also reported slowing job growth and increased hiring volatility, particularly in service industries, with rising instances of furloughed workers being laid off permanently as demand remained soft.
Lydia Boussour, a senior economist with Oxford Economics in New York, estimated that payroll gains in line with expectations would leave one out of two laid-off workers still unemployed, with an increased risk of a prolonged high unemployment spell. Though wages surged at the depth of the pandemic, that was because the job losses were concentrated in the low wage services industries like restaurants and bars.