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 as President Donald Trump heads into an uphill fight for re-election.
The Labor Department’s employment report, coming at the same time transportation to manufacturing companies announce layoffs, could add pressure on the White House and Congress to restart stalled negotiations for another stimulus package.
Either way, the rising unemployment will likely become political ammunition for Democrats two months ahead of the presidential election.
Programs to help businesses pay wages have either lapsed or are on the verge of ending. A $600 weekly unemployment supplement expired in July.
Economists credited government largesse for the sharp rebound in economic activity after it nearly ground to a halt following the shuttering of businesses in mid-March to control the spread of the coronavirus.
“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.”
According to economists, nonfarm payrolls rose by 1.4 million jobs last month, with some of the anticipated gains coming from hiring for the 2020 Census.
Employment increased 1.763 million in July and its growth peaked at 4.791 million in June.
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