Strong jobs data from US

US job growth rose solidly in July amid demand for workers in the services industry, suggesting the economy maintained its strong momentum at the start of the second half.

Nonfarm payrolls increased by 943,000 jobs last month after rising by 938,000 in June, the labour department said in its employment report on Friday. Job gains were, however, flattered by shifts in seasonal employment at schools caused by the pandemic. The unemployment rate fell to 5.4% from 5.9% in June.

The jobs data followed news that in the second quarter the US economy fully recovered the sharp loss in output during the brief pandemic recession. Economic growth this year is seen at about 7%, which would be the fastest since 1984. But surging Covid infections pose a risk. While major disruptions to economic activity are not expected, with nearly half the population fully vaccinated, spiralling cases could keep workers at home and hamper hiring.

A shortage of workers has left employers unable to fill a record 9.2-million openings, due to lack of affordable child care and fears of contracting Covid, among other things.

Republicans and business groups blame enhanced unemployment benefits, including a $300 (about R4,300) weekly cheque from the federal government, for the labour crunch. Though states led by Republican governors have ended these benefits there is little evidence that this boosted hiring.

The worker shortage is expected to ease when schools reopen, but some economists say the economy is creating many lowskilled jobs and there are not enough people to take them.

“One of the biggest problems is roughly two-thirds of our job openings are in the kind of jobs that don’t require any type of a college degree,” said Ron Hetrick, senior labour economist with Emsi Burning Glass.

“We have about 6-million job openings not requiring a college degree, but we only have 3.4-million who are unemployed that don’t have a college degree.”