Another 1.8 million jobs were added in July, bringing the 3-month total to 9.3 million.
American workers and businesses continue to prove that they are fighting for the great American comeback. The United States economy has now added 9.3 million new jobs in the past 3 months, beating market expectations by a combined 12 million. The Bureau of Labor Statistics reported adding another 1.8 million new jobs in July, exceeding expectations for the third straight month. Down from a high of 14.7 percent just three months prior, the official unemployment rate reached 10.2 percent in July.
Historically less-advantaged groups have experienced large gains. Following massive losses during the pandemic lockdown, Black Americans have recorded nearly a million new jobs since April, and their unemployment rate fell by 0.8 percentage points in July alone. Hispanic Americans and Asian Americans also saw substantial unemployment rate declines in July, decreasing 1.6 percentage points to 12.9 percent and 1.8 percentage points to 12.0 percent, respectively. The unemployment rate fell by 1.2 percentage points for those without a high school education, and by 1.3 percentage points for those with only a high school education.
The industries with the deepest job losses have experienced the strongest recoveries. The leisure and hospitality and retail trade industries, which traditionally employ low-wage workers, added a combined 850,000 jobs in July. The leisure and hospitality industry alone added nearly 4 million jobs since April, making up close to half of the jobs the industry lost in the two months prior (see figure below).
There is still much work to be done to return to the strong Trump Economy that prevailed before COVID-19 struck. Just over one in 10 Americans in the labor force remain unemployed, slightly above the peak reached during the Great Recession. But the progress made over the past three months demonstrates that a rapid recovery is possible.
The official unemployment rate fell by 0.9 percentage points in July, and by 4.5 percentage points over the past 3 months. As CEA has previously reported, these declines likely understate the actual reductions in the unemployment rate. This is a result of a BLS-acknowledged issue in which workers who were classified as “employed” should instead have been classified as “unemployed on temporary layoff.” CEA estimates that the unemployment rate would have been 0.9 percentage points higher at 11.1 percent if workers incorrectly categorized as “employed but not at work for other reasons” were instead counted as unemployed. This has fallen by 8.5 percentage points since April, more than the 4.5 percentage point drop in the official rate.
The COVID-19-induced shutdown took an unprecedented toll on the economy. Fortunately, the recovery has been unprecedented, as well. After employment reached a trough in 2010 following the Great Recession, it took well over 4 years to add 9 million jobs. It has now taken just three months to add 9.3 million jobs during the COVID-19 economic recovery. Job growth has shattered expectations by a combined 12 million jobs over the past three months.
These are encouraging signs for the great American comeback.
