WASHINGTON (AP) – U.S. employers added just 235,000 jobs in August, a surprisingly weak gain after two months of robust hiring and the clearest sign so far that the spread of the delta variant has discouraged some people to fly, buy and eat out.
August employment growth reported by the government on Friday it fell well below the significant gains of about one million in each of the previous two months. Recruitment jumps in June and July it had followed widespread vaccines that allowed the economy to completely reopen restrictions on the pandemic. Now, with Americans buying fewer plane tickets, reducing hotel stays and filling fewer entertainment venues, some employers in these areas have slowed hiring.
However, the number of job vacancies remains at record levels, with many companies eager to work, and hiring is likely to pick up in the coming months. Even last month’s modest employment growth was enough to reduce the unemployment rate to 5.2% from 5.4% in July. With consumers willing to spend and companies trying to hire, the U.S. economy looks healthy.
Details of Friday’s job report showed how the delta variant slowed employment growth last month. The sectors of the economy where recruitment was weakest – restaurants, hotels and retailers – were mainly those that require face-to-face contact with the public. More Americans said they could not work in August because their employer closed or lost business due to the pandemic of what was said in July.
Recruitment in the category that includes restaurants, bars and hotels fell to zero in August after these sectors had added approximately 400,000 jobs in both June and July. The restaurant, after fully recovering in late June, has fallen to 9% below pre-pandemic levels, according to the OpenTable booking website.
Some live shows, including the remaining concerts of country tour star Garth Brooks, have been canceled. Companies are delaying their return to the offices, threatening the survival of some downtown restaurants, cafes and dry cleaners.
“The delta variant has had a greater weight in the job market than many of us expected,” said Sarah House, a senior economist at Wells Fargo. “Workers will take longer to return to the job market than we expected.”
As a result, many economists are now predicting that the Federal Reserve will not make a long-awaited announcement that it will begin re-marking its low interest rate policies until November or later.
The August employment report “hits” at the prospect of the Fed announcing a setback when it meets later this month, House said. Fed Chairman Jerome Powell made that clear last week that the central bank would begin reversing its ultra-low rate policies later this year if the economy continued to improve.
The lack of available workers remains a major obstacle to solid hiring. A few months ago, many economists had been waiting for a pandemic that was fading to encourage more people to resume their job search. They hoped that worries about getting sick from work would fade. And as schools opened, more parents, especially women, would return to the staff.
So far, this has not happened. But the demand for workers remains strong. The job listing website, in fact, says so the number of jobs available grew in August. And the National Federation of Independent Enterprises said its polls show that half of small businesses have jobs they can’t hold.
Across the economy, this difficulty is forcing employers to offer higher pay. Average hourly wages rose a robust 4.3% in August compared to the previous year.
Walmart announced this week that it will hire 20,000 people to expand the supply chain and online shopping operations, including jobs for order fillers, drivers and managers. Amazon said Wednesday which wants to cover 40,000 jobs in the United States, mostly technology and hourly jobs.
And Fidelity Investments said Tuesday which adds 9,000 more jobs, including in customer service and computing. In these sectors, where face-to-face contact with the public is not generally necessary, recruitment remains strong.
Beneficiaries include Hailey Uejo, who began work on August 1 as a project manager at VIDSIG, a San Francisco-based company that provides a live video chat platform through which customers can interact with celebrities and experts. Previously, Uejo, 24, had worked as a special education teacher. But she felt exhausted by the online classes.
“COVID gave me the excuse to try something new,” he said.
Jonathan Yarnold, CEO of VIDSIG, said the delta variant has not affected his company’s plans to add 20 to 25 jobs.
Similarly, Sean O’Scannlain, CEO of Fortune International, which imports, processes and distributes seafood, said his company is on track for record sales and has surpassed pre-pandemic levels. The delta variant has not curbed demand from the high-end grocery stores and grocery stores it supplies.
Still, O’Scannlain said he struggles to fill 42 open jobs for truck drivers, warehouse workers, accountants and sales workers. He said he believes a $ 300-a-week federal unemployment supplement, which began in March, discouraged some job seekers.
Other factors, too, O’Scannlain said, have made it harder to hire: Since big companies like Amazon and Walmart have raised wages, they’ve had to match their higher wages. In general, the salary has increased from 10% to 15% compared to a year ago. And some people are afraid of getting sick from work from Delta.
“Those fears eased in the spring as the numbers went down,” he said. As infections have increased, “these concerns have increased again.”
Governors in about 25 states stopped paying the $ 300-a-week federal unemployment benefit in June and July because, they said, the extra money deterred job seekers. Still, the proportion of Americans in employment or looking for a flat era in August, according to Friday’s report, suggests the cut has had little impact so far. Some academic research has found that the first cuts have led to only a small increase in recruitment.
The $ 300 payment, as well as two federal programs covering self-employed and contract workers and the long-term unemployed, will end next week. As a result, some 8.9 million people will lose all unemployment benefits.
One of them is Marianne Leblanc. A live event designer, Leblanc, 58, lives in Las Vegas, where she used to oversee huge corporate exhibitions at conferences such as the Consumer Electronics Show. Once the pandemic came, all that work dried up.
Leblanc has recently accepted a nine-week temporary job that will force him to fly to several cities, many of them with a high number of COVIDs, which he refuses to do because he has lupus, which weakens the immune system.
He is also interviewing for a permanent job, but has seen previous opportunities pass. He has to lose the house he rents once his jobless help is over.
“It’s been an emotional roller coaster for the last year and a half,” Leblanc said, “and it’s amplifying” by the impending loss of aid.
The slowdown in recruitment in the U.S. contrasts with an improved picture in Europe, which has surpassed the U.S. in total vaccine doses and a leveling of new infections is helping to limit the impact of the delta.
Trade and leisure activity in Europe has already surpassed its pre-pandemic level and European Union officials say they have achieved their goal of fully vaccinating 70% of adults by the end of summer, a higher proportion than in the US. In addition, France, Germany and Italy have restricted the access of unvaccinated people to covered meals and other activities.
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AP writer David McHugh contributed to this report from Frankfurt, Germany.