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Is the US job market already losing steam?
The Labor Department’s July job report appears on Friday at 8:30 a.m. (CET). Economists are forecasting net income of 1.482 million jobs, a number that would be fantastic in normal times but, in the current circumstances, is a disappointing slowdown from the previous two months.
Where do we see a slowdown? Labor ministry data shows that the number of people applying for unemployment insurance rose towards the end of July. And separate research by the Census Bureau and payroll software provider Homebase shows employment has stagnated or declined since June.
The shift correlates with an increase in Covid-19 cases. By late July, small business employment in states that were initially hard hit by Covid-19 and reopened late was about the same as in states that reopened early but then faced increasing numbers of infections. Homebase data is displayed. None of the states tended in the right direction.
Another reaction to increasing case numbers? More social distancing. The mobility measures on early openings compared to late openings have converged. One possible advantage of renewed caution: four virus hotspots – Arizona, California, Texas and Florida – showed up for the time being Signs of improvement after being hit by the virus in July. One possible finding: “The future economic recovery is likely to be geographically uneven, which is due to the local infection conditions,” wrote the economists of the Dallas Fed in one new research report.
What do the evolving trends mean for Friday’s employment report? Don’t be surprised if there is a surprise either way. Forecasts are particularly tense in a crisis-ridden economy and especially in this crisis. However, some economists warn of a significant deterioration. “We conclude that the pace of improvement in the labor market has stalled and is changing gradually, although it is not clear that this is fully captured [Friday’s] Job report from July, “wrote Deutsche Bank economists in a message to customers.JS
WHAT YOU NEED TO WATCH TODAY
Bank of Japan Governor Haruhiko Kuroda speaks at a Columbia Business School webinar at 8 a.m. ET.
The ADP Employment Report An increase of 1 million jobs compared to the previous month is expected for July. (8:15 am ET)
The US trade deficit June is expected to decline from $ 54.6 billion in the previous month to $ 50.3 billion. (8:30 a.m. ET)
IHS Markits The US services index for July is expected to hit 49.6, unchanged from a preliminary reading. (9:45 ET)
The Institute for Supply Management The July non-production index is projected to drop to 55 from 57.1 in the previous month. (10 a.m. ET)
Loretta Mester, Cleveland Fed President speaks on the economic outlook at 5:00 p.m. ET.
TOP STORIES
Trade talks
The US and China agreed to high-level talks on Aug. 15 to assess compliance with Beijing regulations bilateral trade agreement Signed earlier this year, according to those briefed on the matter. The trade pact has emerged as one of the few remaining ways for the two countries to engage on issues of mutual interest. Relations have deteriorated in recent months as the Trump administration pounded Beijing over the coronavirus outbreak, Hong Kong, and treatment of Uyghurs in western China. The focus will be on the so-called phase one deal, which includes China’s commitment to increase its US imports by $ 200 billion over two years. According to Lingling Wei and Bob Davis, China has fallen far short of the pace needed to achieve the goal.
The latest point of contention: Washington’s ultimatum to the Chinese owner of TikTok –Sell the app’s US activities or leave the country.
save me
White House negotiators said they wanted to reach an agreement with the Democrats on a new one Coronavirus Relief Package By the end of the week, both sides said they had made progress on bridging the gap in unemployment benefits and other assistance proposals. Neither side announced whether progress had been made on the toughest issues, including aid to states and communities, and how much money the federal government would allocate to supplement state unemployment benefits, say Siobhan Hughes and Kristina Peterson.
Democrats are trying to apply the coronavirus relief law pick up the cap state and local tax deductions. Republicans mock efforts to cut taxes on the rich, Richard Rubin reports.
Black-owned businesses have been particularly hard hit by the coronavirus pandemic due to a combination of geography, the limited scope of an important federal aid program and weaker relationships with banks, a new report found by the Federal Reserve Bank of New York. The authors suggest their findings may provide insight to federal policy makers as they consider additional coronavirus help, reports Amara Omeokwe. “For the greatest impact, the next round of Covid-19 aid should be more geographically targeted to focus on the hardest hit areas and communities that lack critical infrastructure (hospitals, banks) to fill in the gaps to close, “says the report.
Don’t go by
The number of companies seeking Chapter 11 protection rose 52% in July year over year as the coronavirus pandemic disrupted the economy and shook businesses from coast to coast. According to legal services firm Epiq Systems, there have also been bankruptcy filings. The upward trend in Bankruptcy filings In the US, it is expected to continue in the coming months when state-funded aid programs come to an end, reports Aisha Al-Muslim.
Cheers (have a drink)
North America was one of the most resilient Liquor markets in the world since the beginning of the Covid-19 pandemic. It is a shame for Diageo that America’s extraordinary drinking habits cannot be exported. The London-based maker of Johnnie Walker Scotch and Guinness Stout said Tuesday that sales in North America were down only 1% in the six months to June compared to the same period in 2019. The much tougher conditions in all other countries have reduced group sales by a total of 23%. Carol Ryan reports.
WHAT WE’LL READ
A second wave of US layoffs is underway. A new Cornell-JQI-RIWI survey 31% of recalled workers have been made redundant and a further 26% have been informed by their employer that they may be made redundant, leading to a significant increase in “healthy” conditions. The results suggest that “repeated layoffs and vacations are not directly related to the recurrence of the Covid-19 virus (and renewed economic shutdowns in affected states), but rather to macroeconomic conditions in the US and, likely – exhaustion of.” [Paycheck Protection Program] Company funds. “
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