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U.S. Added 235,000 Jobs In August—Revealing Worse Than Expected Labor Market Slowdown As Delta Variant Stunts Hiring

Topline

The United States added back a fewer-than-expected 235,000 jobs in August, according to data released Friday by the Labor Department—marking a significant slowdown from July as experts note the pandemic’s resurgence has started to curtail the economic recovery.

Key Facts

August’s job additions were significantly lower than the 720,000 new jobs economists were expecting, according to Bloomberg data, and they represent a significant slowdown from the roughly 930,000 jobs added back in July.

Despite the slowdown, however, the unemployment rate of 5.2% fell from 5.4% in July to its lowest point during the pandemic, but is still well above pre-pandemic levels of less than 4%.

There are now 8.4 million unemployed people in the United States, falling slightly since July—by about 300,000—and still markedly higher than 4 million in February 2020, the government said.

According to the report, industries with notable job growth included professional services, transportation, warehousing and manufacturing, while employment in retail trade actually declined over the month.

Surprising Fact

The unemployment rate hit a record high of 14.7% at the height of pandemic uncertainty in April 2020. Overall, the U.S. economy has added back roughly 14 million of the 22 million jobs lost at the height of pandemic uncertainty in March and April of last year.

Key Background

The disappointing jobs report comes just days after ADP’s monthly employment report highlighted a “downshift” in the labor market recovery marked by a decline in new hires last month. “The delta variant of Covid-19 appears to have dented the job market recovery,” Mark Zandi, the chief economist of Moody’s Analytics, said in a statement alongside the report, adding that the labor market remains strong, but well off its performance in recent months. “Job growth remains inextricably tied to the path of the pandemic.” Other experts have warned the post-Covid labor market recovery could drag on for years, and despite strong gains in past months, the Federal Reserve last week said its performance was still too “turbulent” to warrant a change in pandemic-era monetary policy. Friday’s disappointing report should only bolster that argument.

Further Reading

Delta Variant Has ‘Dented’ Job Market: Private Sector Added Disappointingly Low 374,000 Jobs In August (Forbes)

New Jobs Surged By Nearly 1 Million In July As Unemployment Rate Drops To Better-Than-Expected 5.4% (Forbes)

This is a developing story. Please check back for updates.

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