U.S. job growth likely slowed further in August as financial assistance from the government ran out, threatening the economy’s recovery from the COVID-19 recession
) said it was targeting 1,400 U.S. salaried jobs for elimination by year end. Mass transit rail operators are also eying furloughs.
“Restaurants and other businesses in the services industry are not going to continue calling workers back when demand is not there,” said Ryan Sweet, a senior economist at Moody’s Analytics in Westchester, Pennsylvania. “We need the stimulus like weeks ago.”The unemployment rate is forecast to have dropped to 9.8% in August from 10.2% in July, according to the Reuters survey. That would leave it just under the 10% peak shortly after the end of the 2007-09 Great Recession.
Lydia Boussour, a senior economist with Oxford Economics in New York, estimated that payroll gains in line with expectations would leave one out of two laid-off workers still unemployed, with an increased risk of a prolonged high unemployment spell. Slowing job growth will likely have a limited impact on gross domestic product in the third quarter, which economists estimate could rebound at an annualized rate of as high as 30% after sinking at a historic 31.7% pace in the April-June quarter. But it will hurt fourth quarter GDP, with consumer spending taking a hit.
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