US employment growth slowed significantly in July with the ‘second wave’ increase in COVID-19 infections but still came at a remarkable gap over more pessimistic market expectations.
The US Department of Labor said on Friday that non-farm payrolls rose by 1 million 763 thousand jobs last month. Economists surveyed by Reuters were expecting a figure of 1.6 million. The employment figure had reached a record of 4 million 791 thousand in June.
This sharp decline from the previous month’s record peak strengthens the view that the US economy has slowed its recovery from the recession caused by the pandemic, but at the same time shows that the recovery continues, displaying some resistance.
The unemployment rate in the US fell from 11.1% in June to 10.2% in July. But how exactly this figure reflects reality in the fallout cloud of the crisis is a question asked by experts, including Minneapolis Fed Chairman Neel Kashkari. In mid-July, at least 31.3 million people were receiving unemployment benefits.
The retreat in the labor market is bad news for President Donald Trump, who fell behind Democratic Party candidate former Vice President Joe Biden in opinion polls for the November 3 election.
US aid package talks
Meanwhile, negotiations for a new economic aid package, which wraps up its second week in the US Congress, continue sans an agreement and with little progress. White House and Republicans failed to overcome their differences on important issues, including the extent of state aid to tens of millions of unemployed Americans in their Congressional negotiations with Democrats.
Reports and statements from the Capitol Hill show that the two sides are still trillions of dollars away from each other. While Republicans along with the Trump administration bid $1 trillion, Democrats insist on a $3.4 trillion package including for bailing out Democratic cities whose economies have gone south.
President Trump said that if Congress fails to reach an agreement today, he will take executive action on income tax, an extension of unemployment benefits, and blocking of evictions.
Trump’s economic advisor Larry Kudlow told Bloomberg on Friday that the talks were at a stalemate.
Trump signed a decision late Thursday night to ban any transactions made by the US or US companies with Chinese company Bytedance that own TikTok and WeChat. The ban will take effect within 45 days. The decision on national security grounds follows Trump’s 45-day allowance to Microsoft for negotiating a potential purchase of the popular short video application TikTok’s US operations.
In a briefing letter to Congress, Trump stated that TikTok gave the Chinese Communist Party direct access to private information of Americans and federal government employees, which could be used for personal, corporate, or government-related blackmail or espionage.
TikTok reacted sharply to Trump’s decision, announcing that it would take the ban to US courts.
South China Sea dispute
On the South China Sea, one of the most important crises between the two major economies of the world, the US accelerated its efforts to form an Indo-Pacific alliance against Communist China.
US Secretary of State Mike Pompeo talked yesterday with his Filipino, Malaysian, Vietnamese, and Indian counterparts.
Pompeo previously talked with Australia, Indonesia, and Brunei.
The United States, along with other countries in the region, rejects China’s claims on the South China Sea, one of the most strategic waterways for global commerce, and routinely passes through the region with warships on the grounds of freedom of movement in international waters.