The US economy added 1.8m jobs in July but the rate of job creation slowed amid rising coronavirus cases and 16.3m Americans remained without work.
The rise in Americans entering work took the unemployment rate to 10.2 per cent, down from 14.7 per cent in April, according to the Bureau of Labor Statistics (BLS).
Although it was slightly above expectations, the rate of new job creation has slowed sharply since June when a record 4.8m jobs were added. And the unemployment rate was still worse than anything since the Great Depression outside of the last few months.
It comes with Congress and the White House at an impasse over the next round of stimulus. Republicans and Democrats disagree over the level of additional unemployment benefits among other key issues.
The BLS said July’s employment growth “reflected the continued resumption of economic activity”.
It said there were “notable job gains” in leisure, hospitality, the government sector, and retail. New jobs were also created in professional and business services and health care.
Rising coronavirus cases dent US economy
However, the unemployment rate is up 6.7 percentage points since February, with 10.6m more people out of work.
A central reason for the slowdown was the surge in coronavirus cases that occurred in July. The US was regularly adding more than 60,000 cases a day. This prompted many states to reimpose some lockdown rules, limiting economic activity.
Racial disparities remained noticeably wide in a country recently rocked by anti-racist protests.
The unemployment rate among white people in the US fell to 9.2 per cent last month. But the rate for black people was 14.6 per cent and had hardly changed from June to July.
Josh Lipsky, a director at the Atlantic Council think tank, said: “Today’s report sends one clear message: Without more stimulus the bottom could fall out from the American economy.”
“Millions of unemployed citizens, renters across the country, small business owners, and every state government are asking for help in a time of crisis. We can worry about the price tag later.”