The U.S. economy added 943,000 jobs in July and unemployment fell from 5.9 percent to 5.4 percent according to the latest statistics released by the Bureau of Labor on Friday morning.
The numbers surpass expectations but come amid warnings that the rapid spread of the Delta variant could reverse gains amid fears of fresh lockdowns and closures.
Employment growth exceeded the 850,000 gain in jobs predicted by economists as Americans started seeing signs of a return to normality this summer.
Hotels and restaurants added 327,000 jobs last month as they reopened and business picked up and local public schools added 221,000.
Families were returning to restaurants and sports fans filled stadiums across the country, but the explosion in cases in recent weeks has sparked fears the numbers could trend down again in the coming months.
Alfredo Ortiz, president of the Job Creators Network, said only ten percent of small businesses said they had fully recovered.
‘Even these gains are in danger, however, as blue state governors and mayors impose new mandates,’ he said.
‘Mayor de Blasio is the poster child, imposing new mandates on small businesses that are already experiencing staffing shortages.
The U.S. economy added 943,000 jobs in July and unemployment fell from 5.9 percent to 5.4 percent according to the latest statistics released by the Bureau of Labor on Friday morning
Jason Furman, a leading economist in the Obama White House, welcomed progress but said the economy was still millions of jobs short of where it would have been without the pandemic
Jason Furman, who was chairman of President’s Biden’s Council of Economic Advisers, welcomed the numbers but pointed out the economy was missing millions of jobs.
‘Still a long way to go: we’re about 7.5 million jobs short of where we should have been right now absent the pandemic,’ he said on Twitter.
‘But we’ve made a lot of progress.’
Scott Anderson, chief economist at Bank of the West in San Francisco, told the New York Times: ‘It’s been a sprint in terms of growth, but we may be moving into more of a marathon.
‘Travel season is winding down, and the Delta variant is a big concern.’
The coronavirus triggered a brief but intense recession last spring, forcing businesses to shut down and consumers to stay home as a health precaution. The economy lost more than 22 million jobs in March and April 2020. Since then, though, it has recovered nearly 16 million jobs, leaving a 6.8 million shortfall compared to February 2020.
The rollout of vaccines has encouraged businesses to reopen and consumers to return to shops, restaurants and bars that they had shunned for months after the pandemic struck. Many Americans are also in surprisingly strong financial shape because the lockdowns allowed them to save money and bank relief checks from the federal government.
As a result, the economy has bounded back with unexpected speed. The International Monetary Fund expects U.S. gross domestic product – the broadest measure of economic output – to grow 7% this year, its fastest pace since 1984.
Employers are advertising jobs – a record 9.2 million openings in May – faster than applicants can fill them.
Greg McBride, chief financial analyst at Bankrate.com, told the Associated Press: ‘Things are undeniably moving in the right direction.’
Some businesses blame generous federal unemployment benefits – including an extra $300 a week tacked on to regular state jobless aid – for discouraging Americans from seeking work. In response, many states have dropped the federal unemployment assistance even before it is scheduled to expire nationwide Sept. 6.
Many Americans may be staying out of the job market because of lingering health fears and trouble obtaining childcare at a time when many schools are closed.
Another problem: Many of those thrown out of work by the coronavirus recession can´t go back to their old jobs.
Rubeela Farooqi, chief U.S. economist at High Frequency Economics, notes, for instance, that about 80,000 restaurants have closed since March 2020. So those displaced workers must find new employers and often new careers.
There are growing concerns that the surge in cases of the Delta variant could prevent the economy from recovering with the threat of new lockdowns and restrictions
‘Matching the unemployed to job openings will likely be a more prolonged process, given that finding a new job, perhaps in a new industry, will be a challenge,´´ Farooqi wrote in a research report.
Farooqi also said the labor market may face longer-term struggles once temporary labor shortages sort themselves out. This is because many businesses adjusted to working with fewer employees during the pandemic, often using technology that reduced the need for human labor.
Also clouding the outlook for jobs is a resurgence of COVID-19 cases caused by the spread of the highly contagious delta variant.
The United States is reporting an average of more than 75,000 new cases a day, up from fewer than 12,000 a day in late June – although still well below the 250,000 levels of early January.
Oxford Economics´Boussour says the spread of the delta variant might have ‘have dampened workers´ willingness and ability to rejoin the workforce’.
But she doubts it will have a big impact on the July numbers because virus worries didn’t escalate until after the Labor Department had collected its hiring data for last month.