While the July Employment Report showed 1.8 million jobs were added during the month, well ahead of the expected 1.6 million, it was a hefty drop compared to the 7.5 million jobs created in May and June. In examining the data, we find despite the rebound in manufacturing and services data, so far less than half of the jobs lost due to the pandemic have been recovered.
While this points to companies being more productive with existing workers, it’s a headwind to consumer spending, a key ingredient for the domestic economy. And with incremental unemployment benefits, at least for now, having expired, it means consumers feeling the pinch of our Middle-class squeeze investing theme will be cutting back on spending both discretionary and non-discretionary. Per the latest Household Pulse Survey it looks like rent payments are one such area.
An estimated 27% of adults in the U.S. missed their rent or mortgage payment for July, according to a nationwide survey conducted by the U.S. Census Bureau weekly over the last three months. Among renters alone, just over one-third (34%) said during the waning days of July that they had little to no confidence that they could make their August rent payment, a stark measure of the ongoing economic devastation for households stretched to the brink by coronavirus pandemic.
The Household Pulse Survey paints a picture of a nation veering toward widespread financial precarity. Over the last 90 days, the Census Bureau conducted this weighted survey by polling Americans weekly on their financial, physical and mental well-being. The responses show large shares of Americans foregoing medical care and many struggling with food insecurity. During the week of July 21 — the final week of the census survey — an estimated 35% of Americans said they expected to lose employment income due to the pandemic. One-third of respondents reported feeling anxiety most days or every day of the week.