Businesses are bracing for a tough year ahead as a record number of Americans turn to online sales to get by.
But the number of businesses that use online to raise money to pay employees, manage budgets and make other payroll-related decisions has grown rapidly, creating a financial strain that could lead to layoffs, the government says.
On Wednesday, the U.S. Treasury Department said that a record-high 1.5 million Americans used the U-Verse website to make payroll last year, up from 1.2 million in 2013.
A report from the Government Accountability Office last week found that about 1 in 5 American workers is expected to need help from their employer this year, with a record 16.2% of workers and 17.6% of employers expected to make more than $100,000 in payroll tax credits, unemployment benefits or other benefits in the coming year.
In addition, about 1.6 million workers in 2017 will be under an annual unemployment benefit, the GAO said.
Meanwhile, the economy is growing more slowly than it did during the recession.
In fact, the Labor Department said on Tuesday that the U6-to-6.5-year average growth rate in employment has slowed to an annualized rate of 0.5% from 1% in 2016.
The rate is below the long-term average of 0% in the post-World War II period.
Economists polled by The Associated Press had expected an uptick in hiring this year.
But in fact, they said, hiring has slowed more sharply than expected in recent months, reflecting the impact of the Zika virus pandemic and uncertainty over the impact on exports.
The jobs report was not a surprise.
The economy has been slowing since last year as the federal government and the private sector have been hiring and a number of states have started reducing taxes on the wealthy.
But it did raise the question of whether the economy will pick up and start picking up again, or if the recovery will stall.
“The economy is in a recovery mode and is moving forward,” said Paul Ashworth, chief economist at Markit Holdings Ltd.
“I would expect the job numbers to grow somewhat more in the second half of this year as businesses start hiring again.”
In its second annual jobs report for June, the Commerce Department said job creation in June was the lowest since October 2016.
That was after an all-time low of 52,931 in May.
The agency said unemployment, which measures the number who are looking for jobs but are not actively looking for work, rose to 6.1% in June, up slightly from 6.2%.
The labor market has remained weak, even as the economy has bounced back and is growing at an annual rate of 2.9%.
But it is not clear if that will last into the next several months.
President Donald Trump and some economists have argued that the economy needs a recovery boost if it is to return to full employment and economic growth.
Since he took office, the unemployment rate has dropped to 4.8%, below the 5.2%-to-5.9% average of the postwar era.
But some experts say it may be too early to make that determination, given the economy remains very much in the early stages of the recovery.
If the jobless rate drops further, the Fed could decide to lift its benchmark interest rate to a rate close to its target, which would help to offset some of the negative effects of the recent contraction.
But other Fed officials say they don’t think the current low level of inflation is good enough to warrant such a move.
For now, the recovery is expected as the Fed starts to hike interest rates in the spring and summer of 2018.
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