ARI SHAPIRO, HOST:
The U.S. job market continues to dig its way out of the pandemic's deep hole, but the recovery lost some of its bounce. Employers added 1.8 million jobs in July. That's less than half as many as the month before. Sarah House is a senior economist at Wells Fargo Securities.
SARAH HOUSE: It looks like a lot of the improvement in the second half of July really began to slack off.
SHAPIRO: NPR's Scott Horsley joins us now to explain.
Hi, Scott.
SCOTT HORSLEY, BYLINE: Hi, Ari.
SHAPIRO: Why is job growth slowing down?
HORSLEY: The biggest speed bump has been the pandemic itself. You know, infections surged in much of the country last month. That put the brakes on a lot of economic activity. If you look at restaurants, for example, they added half a million jobs last month, but the hard-hit restaurant industry is still down more than 2.3 million jobs from where it was this time last year. Nick Kokonas is a restaurant owner in Chicago who also runs an online reservation system that gives him a window on the restaurant industry nationwide. He says his own business was slower last month than the month before, and as coronavirus cases took off, a lot of restaurants got hit with new restrictions.
NICK KOKONAS: I know of cases in Florida and Los Angeles and whatnot where restaurants hired people back, and then within days or a week, they were forced to close their indoor operations again and re-furlough some people.
HORSLEY: In Chicago, indoor dining is still limited to just 25% of capacity, and Kokonas says it's hard to make money that way. He is offering outdoor dining but worries that's going to go away once the weather turns cold. So he's afraid there might be more layoffs in the industry come fall.
SHAPIRO: So big picture - the unemployment rate fell last month, but there are still a lot of people out of work. I mean, what is the overall landscape right now?
HORSLEY: Unemployment dipped to 10.2%, but that is still higher than during any previous recession since the Second World War. Even after three months of job gains, we've recovered only about 4 of the 10 jobs we lost during the spring, and that's not counting all the self-employed people who are out of work. So we're really still staring at a big hole.
The federal government has tried to patch that hole by shoveling cash out the door, but much of that greenback cushion is now gone. You know, in many cases, the government's loans to small businesses have been spent already. As of last week, the extra $600 in weekly unemployment benefits have run out. Julia Pollak, who is a labor economist at ZipRecruiter, says unless Congress comes up with some additional help, millions of people who are still unemployed are going to have trouble paying their bills, and that could pose a problem for the broader economy.
JULIA POLLAK: If people stop paying rent, if we see a rise in foreclosures, that could really send a ripple effect throughout financial markets that could make the recovery much, much, much tougher.
SHAPIRO: You know, Scott, early on in the pandemic, a lot of people expressed hope that the recovery would be as steep as the initial crash. From what you're describing, it sounds like that's not what we're looking at.
HORSLEY: It's looking like the recovery is going to be a long slog. Nick Kokonas told me some of his fellow restaurant owners didn't bother switching to takeout during the spring because they thought it would be easier to just shut down for a couple months and then go back to business as usual. They're starting to realize it's not going to work that way.
But, you know, businesses and workers are really resilient. Kokonas himself is looking ahead to winter in Chicago and thinking about maybe renting out a big event space that would otherwise be empty so he can set up tables far apart and keep serving customers. He told me he's really tired and burnt out, but he's also not giving up.
KOKONAS: It's the worst time in all of our lives for the restaurant industry and many other industries, but you have to look at the difficulties simply as a matter of a creative challenge to try to do something positive.
HORSLEY: And that's where a lot of business owners and workers are these days, Ari, as we try to navigate this pandemic economy.
SHAPIRO: NPR's Scott Horsley, thank you very much.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.
