Unemployment Figures Drop to 8.4%

Unemployment figures dropped again across the country for the month of August, falling from 10.2% to 8.4%, despite many employers reducing the number of new positions available.

According to the Labor Department, a further 1.4 million jobs were added within the last month, down from 1.7 million in July. Although the economy appears to be refilling the jobs lost when the coronavirus pandemic first hit America, only around half the 22 million jobs have been filled, meaning many more U.S. citizens are still relying on unemployment benefit.

Last month’s increase in positions filled is believed to be due to staff returning to work rather than new positions, however there are millions of Americans who no longer believe they will be returning to their previous positions.

August also saw around 350,000 government positions become available as well as a further 1 million jobs added by private companies. Although the numbers seem encouraging they are still down on July showing that employers are still unsure of how the economy is progressing, especially with the pandemic still prevalent in many states.

Economist at Oxford Economics Lydia Boussour believes the report “confirms that the labor market has entered a frustratingly slower second phase of the recovery.”

“The fact that employment is settling into a trend of slower, grinding growth is worrisome for the broader recovery” Boussour continued.

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Small businesses are continuing to have low hiring figures as many sectors are continuing to struggle with the effect coronavirus has had on the country. Industries including entertainment, restaurants and hotels have struggled to stay in business due to stay-at-home orders and borders being closed. The airline industry continues to announce layoffs with Delta, Qantas and Virgin Atlantic all announcing job losses in the last week.

Retailers however have seen some growth with an extra 250,000 positions becoming available. Warehousing and transportations organizations have also added jobs with around 80,000 positions emerging thanks to the increase in online shopping.

Another area that has seen growth is manufacturing with 29,000 jobs being added in the car production sector, however construction has seen new opportunities continue to suffer with only 16,000 jobs being added.

Thanks to the global coronavirus pandemic economies around the world have suffered significantly with many nations, including the UK and Australia, confirming they are in a recession. And America is no different, the economy shrank at around 30% annual rate when the country seemed to close down however some states are having a stronger growth than others, in part due to the number of ongoing cases they have.

Daily confirmed cases of coronavirus continue to remain high across the country although some states have managed to reduce their figures dramatically, including New York who has gone from being the epicenter of the crisis to one of the states with the lowest rates of cases. At the time of writing we are seeing around 290,000 new cases per day with more than a thousand daily deaths from covid-19.

However the uncertainty of the virus is causing economies to debate about what to do next. While we are continuing to see high numbers of coronavirus cases other countries including New Zealand, Germany and Spain, have seen numbers of cases surge again meaning that after a partial reopening they have had to close many areas.

In some European countries British tourists were forced to head home early or risk being stranded overseas after their government changed the travel rules for countries where their rates of infection had increased. Like America, this has had a heavy impact on their economies and tourism businesses are desperate for borders to be fully reopened.

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With American unemployment figures continuing to fluctuate President Donald Trump is having a difficult time rallying support for a second term in the White House. The current situation is the worst that America has seen since the 1930s.

Furthermore, future jobs are continuing to decline due to companies, mainly within travel and tourism, announcing they will be reducing their workforces due to the impact of the pandemic.

Coca Cola have announced that they are offering 4,000 employees buyouts due to the loss of 50 per cent of their sales. With arenas, theaters and stadiums continuing to stay closed the company has had to find other ways to replace the sales. The same applies to MGM Resorts who recently announced they would be making 18,000 employees redundant.

Retail is also continuing to struggle with more companies in the first half of 2020 filing for Chapter 11 protection than for the whole of 2019. This week both Bed, Bath & Beyond and Salesforce have confirmed they are cutting jobs – 2,800 and 1,000 respectively.

Currently more than 29 million state unemployment aid payments are being made however many of those are now receiving a lower amount due to the end of the $600 a week federal supplement. There is some good news though as the Trump administration is working to provide some of those with a further $300 each week.

To be able to qualify citizens must receive a weekly payment of at least $100 in state unemployment aid which could see over 850,000 Americans lose out on the payment.

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