The expiration of federal aid for the unemployed at the end of the July and the still-spreading coronvirus were supposed to put a big dent in the economy last month. But so far the evidence is thin.
To be sure, the pace of the recovery has decelerated. The U.S. is regaining jobs at a slower pace several months after the economy reopened, consumer spending has softened and businesses are still hesitant to invest.
Yet the economy is still expanding and looks likely to continue to do so. More people are going out to eat, states such as New York are easing coronavirus restrictions, schools around the country are trying to start back up and businesses are getting creative in making their premises safer for customers and employees alike.
“The big picture is that even in the face of a summer flare-up in virus cases, the U.S. economy managed to soldier on reasonably well,’ said Douglas Porter, chief economist of BMO Capital Markets.
The coronavirus hasn’t gone away and there’s still no cure, leaving many businesses in the lurch. Restaurants can’t fully reopen, brick-and-mortar retailers are bereft of traffic, airports are mostly empty, hotel rooms are largely unoccupied and the major sports leagues are either playing in bubbles or sharply limiting attendance. Life is far from normal.
“Clearly some industries remain flat on their back, and a full labor market recovery for the U.S. economy is not yet in sight,” said chief economist Scott Anderson of Bank of the West.
Where does the economy goes from here? Most Wall Street DJIA, -0.56%
economists predict a slow and gradual recovery, punctuated by occasional setbacks.
Many are still worried the end of federal aid will eventually take the air out of the recovery unless Democrats and Republicans break a deadlock in Washington and come to the rescue again. So far neither side has budged just a few months before what could turn out to be one of the most contentious presidential elections in American history in November.
The surprisingly upbeat August employment report, ironically, could make a deal on more fiscal stimulus harder by undercutting the argument that more aid is needed. Republicans might decide the economy doesn’t need any more help after several trillion dollars in government stimulus and the Federal Reserve cutting interest rates to a record low.
Don’t expect the case in favor of more aid to get much support anytime soon, either. The next few weeks are largely barren of major economic indicators that will reveal any big change in the economy.
The numbers: The U.S. regained 1.4 million jobs in August and the unemployment rate posted a surprisingly large drop to 8.4%, suggesting an economic recovery is still plowing ahead even if the pace of growth has slowed since the start of the summer.
The increase in hiring last month exceeded Wall Street’s forecast. Economists polled by MarketWatch had forecast a 1.2 million gain. U.S. stocks fell in Friday trades.
The employment picture was a bit softer after stripping out the hiring of 238,000 temporary Census workers and those who work in public education.
The most positive news was a big reduction in the official jobless rate to 8.4% from 10.2%, marking the fourth straight decline from a pandemic peak of 14.7%. A separate survey of households showed a much larger number of people returning to work (3.76 million) and a sharp decline in the unemployed (-2.8 million).
“I would say today’s jobs report was a good one,” Federal Reserve Chairman Jerome Powell told NPR in an interview.
One caveat: The jobless rate would have been closer to 9% if households gave an accurate description of their employment status, the Bureau of Labor Statistics said. Some survey respondents have mistakenly classified themselves as absent from work instead of unemployed, a problem that has plagued the BLS survey since the pandemic began.
Several million Americans still haven’t returned to the labor force, however, since the start of the pandemic and some 29 million were reportedly receiving jobless benefits as of the middle of last month.
The start of the school year, what’s more, has also spawned fresh problems for companies and their employers.Many parents lack day-care options and are grappling with how to care for their school-age children learning at home while they work at the same time.
A new Federal Reserve study found the new school year has made it harder for businesses that are hiring to attract workers.
A stalemate in Congress over another financial-rescue package has also left many unemployed Americans in a more precarious financial position. A $600 federal unemployment stipend expired at the end of July and small businesses can no longer apply for loans to help cover payroll costs.
A spate of companies such as American Airlines AAL, +1.87%,
United UAL, +2.16%
and MGM Resorts MGM, +1.95%,
meanwhile, have announced new furloughs and layoffs with their businesses still in a deep slump.
Some companies warn job losses could become permanent without more government help or a faster rebound in the economy.
The U.S. shed more than 22 million jobs during the worst of the pandemic. So far it’s restored about 10.7 million jobs, leaving about half of the people who were laid off still out of work.
What happened: The number of peopled employed by government jumped by 344,000, largely because of a big increase in temporary Census workers.
In the private sector, retailers led the way in hiring again as they brought back almost one-quarter of a million workers. Restaurants also added 134,000 jobs.
Retailers, restaurants and hotels have borne the brunt of the U.S. effort to contain the coronavirus. The number of customers they can allow has been restricted and many Americans are still too worried about the coronvirus to eat out, go to stores or travel.
Even after a spate of rehiring, for instance, some 2.5 million restaurants jobs still haven’t returned.
The rest of the hiring was scattered in a variety of industries.
White-collar businesses added almost 200,000 jobs, though more than half were temporary. Transportation and warehousing jobs increased by 78,000. Health-care providers boosted payrolls by 75,000. Financial firms hired 36,000 workers. And manufacturers added 29,000 people.
Average hourly wages rose 11 cents to $29.47 an hour. The yearly rate of pay appeared to soar early in the pandemic, but only because more lower-paid workers lost their jobs than higher paid ones.
The normally slow-changing wage data is likely to be less useful until the economy is mostly recovered. Wages were growing about 3% a year before the pandemic.
The increase in employment in July marked down slightly to 1.73 million. The increase in June was little changed at 4.79 million.
How many people are really unemployed, though, is still a bit of a mystery. The monthly employment survey puts the number at 13.6 million, but the weekly jobless-claims report indicates it could be closer to 30 million.
A broader measure of unemployment known as the U6 suggests the “real” rate was 14.2% in August, down from 16.5% in the prior month. The U6 rate includes workers who can only find part-time work and those who have become too discouraged to look for jobs because so few are available.
What’s less clear is whether the economy can sustain its foward progress.
Unemployment remains sky-high, the threat of a fresh wave of layoffs is rising and the coronavirus is still very much a threat. A divided political leadership in Washington and one of the most divisive presidential elections in history is unlikely to help, either.
What they are saying? “The August employment report was stronger than we expected,” said chief economist Richard Moody of Regions Financial. “ That said, while the labor market is clearly healing, it remains far from healthy.”
“There are certain industries that are essentially stuck until the virus recedes further, such as air travel, sporting event and concert admissions,” said chief economist Stephen Stanley. “But for most of the economy, the return to normal is occurring inch by inch and day by day, with plenty more to come.”
I wanted to ask you a moral or ethical question concerning COVID-19. Here’s my situation: my sister-in-law who currently lives with me has tested positive for COVID as of yesterday. I have not been tested within the past 30 days.
I work in a long-term care facility/nursing home, in Pennsylvania as a certified nursing assistant. I informed my employer of the positive case in my home. I volunteered to stay home 14 days because I don’t want to risk infection to my residents I take care of, or fellow employees.
My employer says they want me to wear a mask and face shield and come to work, and make sure other employees are wearing a mask properly OR go get tested again. I do NOT want to put my residents at risk and I refuse to go through that painful test again.
They said they are my only two choices. Force me to work as a possible carrier or force me to test again, which I feel is against my rights. Can they give me this ultimatum? I’m assuming if I don’t follow through, they are going to fire me.
Trapped between working, quarantine and a test
This isn’t about you, as much as it is about your patients. Quarantining and having a clearer idea if you have contracted coronavirus or not are the responsible courses of action. That applies to everyone, but it particularly applies to you. A nasal-swab may be uncomfortable for a moment, but a ventilator on one of your patients would be a hell of a lot more uncomfortable.
There are far worse things than a COVID-19 nasal swab. I’ve had one. It was not painful for me. Uncomfortable for a brief moment, perhaps, but it was a small price to pay. There are caveats: A nasal swab test is not 100% accurate, as the doctor or nurse who administers the test will tell you, and there’s nothing preventing you from being infected after you take the test.
However, focusing on that is only going to fuel your indignation and anger against your employer, and distract you from the main issue. This dilemma is about your patients, who are among the most vulnerable population. Nursing homes around the world have been hit hard by the coronavirus pandemic because COVID-19 was transmitted from workers and/or visitors.
More than 3,400 nursing homes in the U.S. have been cited for noncompliance with infection-control requirements and/or failure to report COVID-19 data, the Pennsylvania Health Care Association said. The U.S. has had the highest number of deaths in nursing homes in the world, and has one of the highest rates of COVID-related nursing-home deaths per capita.
In Pennsylvania, nearly 70% of fatalities associated with COVID-19 have occurred within nursing homes or other long-term care settings, according to this letter from four senators to the U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services and Centers for Disease Control and Prevention.
This is all useful information to have when responding to your employer. In the meantime, you can also fill out this online form provided by the Pennsylvania Department of Health to report workplace violations. You should NOT go to work if you have been in contact with someone who has tested positive for COVID-19. Know your rights. Know the rules. And act upon them.
In the meantime, cases keep rising in the U.S. with California becoming the first state in the country to surpass 700,000 confirmed cases; infections there hit 712,475 as of Tuesday with 13,022 COVID-related deaths. New York has recorded 434,756 infections and the highest number of deaths in the U.S. (32,957). COVID has killed 184,450 people in the U.S.
The Dow Jones Industrial Index DJIA, +0.75%,
the S&P 500 SPX, +0.75%
and the Nasdaq Composite COMP, +1.39%
all ended higher Tuesday. Over the past five months, the Dow’s advanced 30%, its biggest 5-month percent gain since July 2009, while the S&P 500 added over 35%, its best 5-month run since October 1938.
(Reuters) – Dell Technologies Inc (N:) on Thursday posted a smaller-than-expected drop in quarterly revenue and beat profit estimates on robust demand for its notebooks and software products for remote work and online learning.
Shares of the company were up 2% in trading after the bell.
The COVID-19 pandemic has led to a rapid shift to cloud, spurring demand for products that allow organizations to carry on, even as millions of people around the globe work from home to stay safe, and schools to hold virtual classes.
Orders for Dell from the education sector jumped 24% in the second quarter ended July 31, and government orders rose 16%.
The company also saw an uptick in demand for its gaming systems, including Alienware as more people turned to gaming during stay-at-home orders.
Revenue from the company’s biggest segment that includes desktop PCs, notebooks and tablets fell 4.6% to $11.20 billion, and data center sales dropped 4.8% to $8.21 billion as companies directed their spending towards remote work, Dell said.
Its software unit VMware (NYSE:), which has directly benefited from the shift to cloud, posted a 9.7% rise in revenue to $2.91 billion. Dell said in July it was planning to spin off its 81% stake in the unit.
The company’s total revenue slid 2.7% to $22.73 billion from a year earlier, but edged past analysts’ average estimate of $22.52 billion, according to IBES data from Refinitiv.
Excluding items, Dell earned $1.92 per share, beating estimates of $1.40 per share.
Net income fell to about $1.10 billion, or $1.37 per share, from $4.23 billion, or $4.47 per share.
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Working mothers got hit with a one-two punch in the early days of the pandemic.
Because child-care demands fell mostly on their shoulders, moms who were lucky enough to keep their jobs were not so lucky in the domestic sphere as shutdown orders kept children home from school, new research by the U.S. Census Bureau and Federal Reserve suggests.
In states with early shutdown orders, mothers took one of two paths, both less than ideal: They temporarily took time off their jobs to care for children, or they worked more hours on nights and weekends while balancing domestic duties, research by U.S. Census Bureau principal economist Misty Heggeness and senior researcher Jason Fields found.
Both options have the potential to create stress and to reduce the quality of a mother’s job performance, which could then hinder future career advancement, Heggeness noted in a previous paper published by the Federal Reserve Bank of Minneapolis.
In some cases, moms were working extra hours to compensate for the lost wages of other working-age adults in the household.
“Trying to balance family life in a pandemic while working more hours than their male counterparts also generates an explosive environment where mothers are vulnerable to increased stress, decreased mental health, and reduced overall wellbeing,” Heggeness wrote.
Workers in states with early shutdowns were 20% more likely than those in states that hadn’t shut down yet to take temporary leave from their jobs, Heggeness wrote in the earlier paper. That rate “appears to be driven solely by mothers who temporarily stopped working,” she said.
Mothers in states where schools and businesses closed early saw a 53.2% increase in taking leave from work. Fathers and women without children saw no significant difference in leave time between early closure and late closure states.
While some research has shown that fathers increased their child-care work during the pandemic, mothers still did the bulk of the labor. That household-level disparity persists, despite broader gains for women in society. For some couples, the question of who should take on child-care duty when schools closed often revolved around which spouse made more money.
In about 70% of married heterosexual couples, wives are the lower-earning spouse, and lower-earning spouses typically leave the workforce to care for children before the higher-earning spouse, previous research has shown.
It’s not enough to strive for gender equity in C-suites and on corporate boards, Heggeness concluded. Those gains don’t mean much if parents, especially mothers, lack affordable child care while they work, she said.
“Without these systems, mommy will forever be stressed and vulnerable to career scarring during any major crisis like this pandemic or any other event that triggers an increase in domestic tasks within her household,” Heggeness wrote.
Heggeness called for a public discussion of plans for affordable, high-quality child care.
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