U.S. economic recovery faces challenges

Added On August 9, 2020

U.S. unemployment rate fell in July for the third straight month, indicating an improvement in a labor market ravaged by the COVID-19 pandemic. But analysts warn that uncertainties remain and recovery has a long way to go.

The U.S. Bureau of Labor Statistics reported Friday that U.S. employers added 1.8 million jobs in July, and the unemployment rate dropped to 10.2 percent amid reopening efforts.
Despite the decrease in unemployment, the slow job growth and further spread of COVID-19 have cast shadows on U.S. recovery pace.
Some economists mentioned that the temporary labor market problems are very deep and that even if individuals on temporary layoff returned to work quickly, the U.S. would still have a recessionary level of unemployment for some time to come.
Data showed that more than 55 million initial jobless claims have been filed over the past 20 weeks, indicating a mounting economic fallout related to the pandemic.
According to economists at Wells Fargo Securities, in the absence of a new supplemental jobless benefit, aggregate U.S. household income will lose roughly 72 billion dollars a month and is likely to weigh meaningfully on consumer spending.
With the pace of re-openings slowing in recent weeks, analysts said further gains in the labor market will be more incremental and a full recovery is years away.