The record level of job growth over the past three months is unlikely to be repeated.
“If we continue to see even a million job gains per month over the next couple of months, that’s a really positive sign,” said Rachel Greszler, a research fellow at the Heritage Foundation, a right-leaning think tank.
The Labor Department on Friday reported that 1.8 million jobs were created in July. That increase is the third-highest on record, yet a significant deceleration from May and June, when about 7.5 million jobs were created in aggregate.
Greszler said she fears that more companies will go out of business permanently in the months ahead, preventing the kind of rapid recovery seen in the past few months, as workers returned to their jobs after the massive temporary separations in the spring.
“It wasn’t feasible to keep having 3 or 4 million job gains every month,” she said.
“We certainly have seen a slow down in robust reopenings [of economies],” said Jane Oates, president of WorkingNation, a nonprofit campaign focused on employment, and a former U.S. Department of Labor official in the Obama administration.
Oates warned that the economy, rather than being set for a strong bounceback, is struggling to refill the jobs that were lost and that the possibility of the labor market returning to normal by the fall is not realistic.
“We’re still digging ourselves out,” she said.
Greszler said that it could take until the middle of next year to recoup the jobs that were lost to the pandemic.
The economy currently faces a 12.9 million jobs deficit from the pre-pandemic levels in February, when more than 152 million people were employed and the unemployment rate was at a 50-year low of 3.5%.
One issue hindering the recovery, as Oates noted, is the spike in coronavirus infections in several states. The country is nearing 5 million cases, and several states have either rolled back or paused reopening their economies to help stem the increase of infections.
Greszler said that containing the virus is key to increasing employment.
“It’s not possible to have a full recovery back to the half-century low unemployment rate we had pre-COVID until the virus is no longer a significant health concern,” she told the Washington Examiner via email.
While infections are on the rise in many parts of the country, other areas of the country have reopened. One bright spot in July’s jobs report was that the leisure and hospitality sector saw employment gains, with 592,000 jobs added last month.
Of the jobs created in this sector, nearly all of them, 502,000, occurred at restaurants and bars. However, July’s gains are nothing compared to the gains of 2.9 million in May and June. But Oates cautioned that all of these positions are at risk of being lost if economies that have reopened are forced to reverse course because of virus flare-ups.
“I think we would all agree that this [restaurants and bars] is the weakest link in our recovery chain,” she said, adding, “we know what happens – as soon as the numbers tick up governors shut down enclosed dining, and sometimes even outside dining.”
The post Job gains will slow in months ahead, labor experts fear appeared first on Washington Examiner.