• President Trump hailed the July unemployment report  as "great"
  • The report appeared to show the upsurge in coronavirus cases last month did not reverse the recovery but the data was collected before the uptick peaked
  • The number of people out of work for 15-25 weeks increased by 4.6 million, foreshadowing "a coming crisis of long-term unemployment"

Though President Trump hailed the July unemployment report as another sign the economy is recovering from the coronavirus-induced recession, others warned Friday the slowdown in jobs creation bodes ill – especially if the White House and Democrats fail to reach agreement on stimulus measures.

“Great jobs numbers!” Trump tweeted shortly after the Labor Department reported 1.8 million jobs were created last month and the unemployment rate dropped 0.9-point to 10.2% -- the lowest level since April but still higher than the peak 10% reached in 2009 at the height of the Great Recession.

“Even after several months of recovery, the unemployment rate remains higher now than at any month following the 2008 financial crisis,” Century Fund senior fellow Andrew Stettner noted in an email to International Business Times, adding that the Labor Department’s methodology underestimates the number of people who have lost work.

The report came as negotiations on economic stimulus measures appeared to have broken down. Treasury Secretary Steven Mnuchin, White House Chief of Staff Mark Meadows, House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer admitted they were still far apart on key issues, including whether to extend the $600-a-week pandemic unemployment benefit that expired last month, after a three-hour meeting Thursday night. Pelosi said Republicans and the president just don’t understand the severity of the situation.

Though 1.8 million jobs were added last month, the number was far fewer than the 4.8 million added in June and the 2.7 million added in May. Additionally, the number of permanent layoffs increased from 20.9% in June to 22.6% of July. In April, only 11.1% of workers thought their jobs would disappear.

Some 22 million jobs were lost in March and April as the economy shut down across the country to contain the contagion.

“Today’s jobs report underscores the fragility of the national economic recovery due to the resurgence of COVID-19 in communities across the country, emphasizing the need for direct federal aid to local governments now so that municipalities can continue providing the essential services that keep our residents safe, spur economic growth and create jobs,” Clarence Anthony executive director and CEO of the National League of Cities, said in an email.

Anthony said without such aid, cash-strapped local governments could be forced to lay off hundreds of thousands of employees atop the more than half-million who already have been laid off.

Stettner said if the Labor Department included the 2.8 million people who are out of the workforce because of pandemic health risks or lack of child care and those working just part time because of other obligations created by the pandemic, the unemployment rate would be closer to 18.5%.

“The number of workers out of work for 15-26 weeks shot up by 4.6 million workers, foreshadowing a coming crisis of long-term unemployment,” Stettner said.

Friday’s unemployment report may not reflect the July upsurge in coronavirus cases, which peaked after the data collection period.

Mark Hamrick, senior analyst at, said he was encouraged to see “the lack of progress in containing the COVID-19 virus didn’t result in an outright decline in employment as feared.”

But, he noted, the major gains in the retail and hospitality sectors, which together accounted for nearly half of the payroll gains, may be short-lived.

“Because the availability of vaccines appears to still be a matter of months away, the risk of further damage to the economy will persist. While bars, restaurants and retail establishments accounted for a good part of the jobs restoration reported in July, there will be a substantial number of business failures in those sectors this year. The echoes of the pandemic downturn will continue to reverberate both for individuals and enterprises for quite some time to come,” he said in an email.