For the first quarter of 2021, the US economy experienced a rebound beyond estimates following a sharp contraction in 2020. This was followed by a slowdown in revival, to just 6.5% annualized growth for the second quarter as Covid-19 cases spiked – down from the expected 8.5%. Latest figures reveal a return to normality, JC Fulton Alliance analysts believe this is likely to create headway for higher annual growth forecasts.
The US economy welcomed the addition of almost 950 000 jobs for the month of July, well above estimates by analysts at JC Fulton Alliance who had anticipated an increase in the range of 870 000 new jobs. These gains allowed for a drop in unemployment by 0.5% to 5.4%, and the labor force participation rate (the number of US citizens employed or actively seeking employment) rose 10 basis points to 61.7%.
JC Fulton Alliance analysts believe the significance of the latter is that it has oscillated between 61.4% and 61.7% since February 2020 and stands as a critical gauge on economic recovery as the volume of job openings since the pandemic wrecked havoc on the employment sector far outweighs to the employment gains. The quantity of unemployed Americans fell by 782 000 in July, down to 8.7million – in stark contrast, 9.2million job opportunities were on offer in May.
The discrepancy in job availability and employment gains could be a result of early retirement, en masse openings seeking the same skills, lack of affordable childcare, concerns over contracting Covid-19 as the new Delta variant spreads, and reluctance in vaccination compliance with more and more companies necessitating workers to be vaccinated.
Analysts at JC Fulton Alliance, however, have pointed to the weekly $300 federal addition to state unemployment benefits as significant contributor, which has allowed unemployed Americans to be more lax in their approach to seeking work. This notion has led several states, most of which are under Republican government, to retract from such relief schemes which were initially set up to run until September 2021.
SOURCE JC Fulton Alliance