Economy

Hiring Falls Off A Cliff

JM Ashby
Written by JM Ashby

The economy added millions of jobs in June in what Trump claimed was the best month of job creation in the history of everything, but that was merely a reflection of people going back to work after coronavirus lockdowns and stay-at-home orders ended.

Most people who had jobs to go back to have already done so, but millions more have permanently lost their jobs and today's payroll report from ADP confirms that.

The economy only added about 16 percent of the private sector jobs that economists predicted.

U.S. businesses appeared to slow their hiring dramatically in July, adding only 167,000 new workers to their private payrolls — a steep drop from analysts’ expectations that could add new urgency to stalled congressional talks over another round of federal coronavirus aid.

The numbers reported Wednesday by ADP mark a significant departure from the more than 1 million jobs that some economists had predicted and a sharp falloff from hiring gains reported just a month prior, suggesting virtually no sector of the U.S. economy has been untouched by the apparent new slowdown.

Tomorrow's more comprehensive report from the Labor Department may not be quite this bad, but it could also be worse.

The ADP report only covers private sector payrolls, but state and local governments are cutting jobs and it remains to be seen how many they've cut in the past month. Only adding 167,000 private sector jobs means any reduction in government employment will be very bad.

The pandemic unemployment program has expired which means people who haven't gone back to work have lost $600 per week in income and that will reduce business for everyone who has managed to return to work.

In just the last week, even the largest consumer chains that are best equipped to handle a crisis like McDonald's, Starbucks, and Dunkin Donuts announced they're permanently closing over 1,400 stores between them because of a drop in consumer spending. Consumer spending certainly won't improve after congressional Republicans and Donald Trump cut off stimulus.

We're caught in a feedback loop in which the GOP's desire to return to normal is actually making it more difficult to return to normal.

Republicans, by the sabotaging recovery efforts, are ensuring there won't be any going back to normal for a long time if ever. I don't know if things can ever truly be normal again as too many people have now seen or experienced hardship for themselves that has only ever been normal for the working poor.

  • muselet

    Predictable, this.

    We have a demand-driven economy (contrary to the Rs’ favorite economic fable), and when demand drops, the economy shrinks and hiring slows.

    Putting more money into the pockets of consumers would benefit them and allow companies to add jobs.

    Given a choice between doing the right thing and clinging to a comforting, 40-year-old economic falsehood, the Rs will choose to cling. Every time.

    –alopecia

  • Draxiar

    Hopefully when Biden comes in he’ll mandate a national lockdown of some sort. By then I imagine that many that aren’t on board with one now will be by then after being affected by it. Naturally there will be those that scream overreach and tyranny but these are likely the same people that had no issue with the measures taken in Portland or in Lafayette Square so it won’t much matter what they think or scream.