US job growth slower than expected in August

Job growth was slow in August, with just 235,000 jobs added, according to the Labor Department. That number is far below expectations and it’s an indication that the spread of the COVID-19 Delta variant is causing consumers to cut back on activities like eating out and shopping.

However, the job market isn’t the only area seeing a slow-down. Growth in the services sector, where most Americans work, also saw a slow-down in August, after it set a record pace just a month before, in July.

According to an AP report on Sept. 3, “The Institute for Supply Management reported Friday that its monthly survey of service industries decreased to a reading of 61.7 in August after hitting a record high of 64.1 in July. The July figure was the fastest pace since this data series began in 2008.”

Any reading above 50 indicates growth in the service industries. The services index has shown growth for the past 15 months, after it contracted in April and May of last year, when COVID triggered the loss of millions of jobs as a result of widespread shut-downs.

The services industry is having a difficult time navigating labor shortages and supply chain disruptions.

A previous Antelope Valley Press editorial focused on the disruptions at many ports across the world, as they struggle with COVID-19 outbreaks and shutdowns. Many companies are having to find alternate routes to deliver goods, causing delays in those goods getting to their final destinations, which are usually retailers.

“The tight labor market, materials shortages, inflation and logistics issues continue to cause capacity constraints,” Anthony Nieves, chair of the ISM services survey panel said.

A recent ISM services survey panel surveyed 18 service sectors, of which 17 reported growth in August, which were led by accommodations and food services, an industry that was hit hard by the pandemic, the AP report said.

“The only industry reporting a decrease in growth in August was arts, entertainment and recreation, a sector that includes amusement parks and movies theaters, an area that could have seen lower demand because of the rise in cases of the delta variant.”

Perhaps that’s true for some amusement parks, but it appears that Southern California amusement parks aren’t having that issue. In fact, since the reservation-only system was dropped and people from out-of-town have been allowed back in, parks like Disneyland, Knotts Berry Farm, Six Flag Magic Mountain and Universal Studios Hollywood seem to be as packed as ever.

Another area that’s been hard-hit by the pandemic is manufacturing. In August, it had a reading of 59.9, however, the survey did find they are continuing to struggle to meet increasing demands, while dealing with supply chain disruptions and a shortage of factory workers.

While we continue to struggle amid the pandemic, so does the economy. We hope to see more job growth soon and fewer employee shortages and supply chain disruptions.