Job growth stalls as Delta variant surges

The U.S. economy created the fewest jobs in seven months during August, when hiring in the leisure and hospitality sector stalled after the Delta variant caused a resurgence in COVID-19 infections.

The spike in Covid cases weighed heavily on employment at restaurants and hotels.

Total nonfarm payroll employment rose by 235,000 in August, and the unemployment rate declined by 0.2 percentage point to 5.2 percent, the U.S. Bureau of Labor Statistics reported today.

So far this year, monthly job growth has averaged 586,000.

In August, notable job gains occurred in professional and business services, transportation and warehousing, private education, manufacturing, and other services. Employment in retail trade declined over the month.

But other details of the Labor Department’s closely watched employment report on Friday were fairly strong, with the unemployment rate falling to a 17-month low of 5.2% and July job growth revised sharply higher. Wages increased a solid 0.6% and fewer people were experiencing long spells of unemployment.

This points to underlying strength in the economy even as growth appears to be slowing significantly in the third quarter because of the soaring infections, driven by the Delta variant of the coronavirus, and relentless shortages of raw materials, which are depressing automobile sales and restocking.

A day before the Labor Department’s closely watched employment report, the the Bureau of Labor Statistics reported the lowest level for initial unemployment claims since March 14, 2020.

“Today, the Bureau of Labor Statistics reported that the American economy added 235,000 jobs in the month of August, and the unemployment rate was 5.2 percent, down from 5.4 percent in July,” said U.S. Secretary of Labor Marty Walsh. “With average growth of 750,000 in the last three months and the lowest unemployment rate since the pandemic began, the Biden-Harris administration is continuing to get Americans back to work.”

Walsh also noted: “But we have work to do to beat back the Delta variant and build an inclusive economy. Rising infection rates in some states hit the food and retail sectors hard, where workers of color and women are disproportionately represented.”

“So as we enter a Labor Day weekend like no other, not only do we show our appreciation for the essential workers who keep us going, we commit to turning that appreciation into action by improving the lives of all workers in America,” said Walsh.

“In the Department of Labor we are seizing this opportunity to empower all workers morning, noon and night – by valuing our nation’s caregiving economy, building a more inclusive workforce, and by ensuring all workers can be healthy and financially secure,” said Walsh. “By continuing to get people vaccinated, creating good jobs through the Bipartisan Infrastructure Act, and investing in our people through the President’s Build Back Better Agenda, we have a tremendous opportunity this Labor Day to advance equity and prosperity for working people.”

The number of long-term unemployed (those jobless for 27 weeks or more) decreased by 246,000 in August to 3.2 million but is 2.1 million higher than in February 2020.

These long-term unemployed accounted for 37.4 percent of the total unemployed in August.

The number of persons jobless less than 5 weeks, at 2.1 million, was little changed.

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