US employment growth slowed considerably in July amid a resurgence in new Covid-19 infections, offering the clearest evidence yet that the economy’s recovery from the recession caused by the pandemic was faltering. The Labor Department’s closely watched employment report on Friday piles pressure on the White House and Congress to reach a deal on another aid package.
Talks have been dragging over differences on major issues, including the size of a government benefit for unemployed workers. A $600 weekly unemployment benefit supplement expired last Friday, while thousands of businesses have burned through loans offered by the government to help with wages.
“The jobs recovery is on very shaky ground and without seat belts for the unemployed provided by additional fiscal stimulus the economy could be in for a very bumpy ride,” said Chris Rupkey, chief economist at MUFG in New York. “There cannot be sustainable economic growth if the country has to carry on with the crushing weight of massive unemployment.” Nonfarm payrolls increased by 1.763 million jobs last month after a record rise of 4.791 million in June. That left payrolls 12.9 million below their pre-pandemic level.