US jobs increase in July

US employment rebounded in July, beating Wall Street's expectations despite an uptick in new coronavirus infections.

Nonfarm payrolls increased by 1.763 million in July and the unemployment rate fell to 10.2 percent, the Labor Department reported Friday.

Wall Street analysts expected private companies to add 1.48 million jobs and estimated the unemployment rate would decline to 10.6 percent.

Prior to the shutdown in March, the unemployment rate hovered at about 3.5 percent, a 50-year low. The unemployment rate peaked at 14.7 percent in April.

"The 1,763,000 increase in non-farm payrolls in July confirms that, despite the resurgence in new coronavirus cases, the recovery is firmly intact," Andrew Hunter, a senior US economist at Capital Economics, said in a research report.

"With new infections now trending lower again and indicators showing tentative signs of a renewed upturn, employment should continue to rebound over the coming months."

A strong economy and a robust job market are key to US President Donald Trump's re-election prospects in November. The July jobs report appears to give him a boost.

However, the economy added about 7.5 million jobs in May and June as many states took initial steps in reopening the economy. July's number, while encouraging, may suggest a slowdown in the recovery.

Despite a three-month gain of 9.3 million newly hired workers or employees returning to their old jobs, total US employment is still about 12.9 million below its pre-pandemic level in February.

Governors throughout the US ordered non-essential businesses to close as part of the effort to curb the spread of the coronavirus.

Employers shed 21 million jobs earlier this year as the economy shut down.

In the third week of March, 3.28 million workers filed jobless claims, or more than four times the previous record set in the 1982 recession.

Unemployment fell across demographic groups in July. White joblessness fell to 9.2 percent from 10.1 percent, Black unemployment dipped to 14.65 percent from 15.4 percent and Hispanic unemployment fell to 12.9 percent from 14.5 percent, the Labor Department said.

Average hourly wages increased by 4.8 percent compared with a year earlier.

However, higher-wage workers quickly returned to their jobs after the initial shutdown while many lower-wage workers remained unemployed and that may have inflated the average. Prior to March, earnings increased about 3 percent.

Government employment grew by 301,000 and the retail sector added 258,000 workers. Professional and business services added 170,000 jobs and healthcare added 126,000, the Labor Department said.

US Labor Secretary Eugene Scalia offered an upbeat view of July's jobs report.

"The July job gains, which are the third-largest in history, occurred in a period when some of our largest states were tightening restrictions in response to rising coronavirus cases," he said in a statement.

But David Berson, chief economist at Nationwide, was more cautious.

"We're in a pretty strong rebound," he, told The Wall Street Journal.

"But the downturn was so big – the hole that was dug was so deep – that it will still take probably at least a couple of years to dig ourselves out."