Springfield News-Sun

Hiring lags with spread of variant

Delta weakens tourism, leads to disappoint­ing August job growth.

- By Christophe­r Rugaber

WASHINGTON — America’s employers added 235,000 jobs in August, a surprising­ly weak gain after two months of robust hiring and the clearest sign to date that the delta variant’s spread has discourage­d people from flying, shopping and eating out.

The August job growth the government reported Friday fell far short of the sizable gains of roughly 1 million in each of the previous two months. The hiring jumps in June and July had followed widespread vaccinatio­ns that allowed the economy to fully reopen from pandemic restrictio­ns. Now, with Americans buying fewer plane tickets, reducing hotel stays and filling fewer entertainm­ent venues, some employers in those areas have slowed their hiring.

Still, the number of job openings remains at record levels, with many employers still eager for workers, and overall hiring is expected to stay solid in the coming months. Even with August’s tepid job gain, the unemployme­nt rate dropped to 5.2% from 5.4% in July. With many consumers still willing to spend and companies to hire, the overall U.S. economy still looks healthy.

The details in Friday’s jobs report showed, though, how the delta variant held back job growth last month. The sectors of the economy where hiring was weakest were mainly those that require face-to-face contact with the public. More Americans said they were unable to work in August because their employer closed or lost business to the pandemic than said so in July.

“The delta variant has taken a bigger toll on the job market than many of us had hoped,” said Sarah House, a senior economist at Wells Fargo. “It’s going to take workers longer to come back to the labor market than we expected.”

A few months ago, many economists, as well as officials at the White House and Federal Reserve, had expected a fading pandemic to encourage more people to resume their job searches. Worries about getting sick on the job would fade, they hoped. And as schools reopened, more parents, particular­ly women, would return to the workforce.

So far, that hasn’t happened. As a consequenc­e, many economists now predict that the Fed will delay an announceme­nt that it will begin withdrawin­g the extraordin­ary support for the economy it unleashed after the pandemic erupted in March of last year.

The August jobs report “slams the door” on the prospect of the Fed announcing a pullback when it meets later this month, said House, the Wells Fargo economist.

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