BREAKING NEWS: US added just 235,000 jobs in August compared to the 700,000 predicted with the Delta surge undermining economic recovery
- The U.S. job market saw hiring slow to 235,000 jobs in August after two strong months with the Delta variant the blame
- Economists surveyed by Dow Jones had been looking for 720,000 new hires
- President Joe Biden will address the job numbers in a speech at White House on Friday before he heads to New Orleans to view the damage from Hurricane Ida
- Delta variant has caused many localities to re-establish mitigation efforts
- Dining numbers are down, as are travel statistics
The U.S. job market saw hiring slow to 235,000 jobs in August, a sharp drop off after two strong months with the Delta variant of the coronavirus to blame.
Still, President Joe Biden said it represented good news.
‘What we’re seeing is an economic recovery that is durable and strong. The Biden plan is working, we’re getting results,’ he said at the White House Friday morning.
The unemployment rate dropped to 5.2%, the Labor Department reported Friday, but the predictions for the job market failed to meet expectations by a significant margin.
‘There’s no question that the Delta variant is why today’s jobs report wasn’t stronger,’ Biden said.
Economists surveyed by Dow Jones had been looking for 720,000 new hires.
The August employment report was expected to show another strong month for hiring, but Wall Street was also watching it for signs of how the Delta variant of the coronavirus has effected the economy.
The coronavirus has been a wild card for economists and the Delta variant has caused the case rate to soar around the country.
Many localities have re-issued mask mandates and other mitigation measures. Consumer spending and confidence have dropped as the case number rise. Dining numbers were down for August as were travel numbers, a notable stat during the summer vacation season.
Other indicators of life returning to normal have taken steps backward: many businesses have delayed returning to the offices while concert tours have been cut.
President Joe Biden boasted that the economic recovery was ‘durable and strong,’ despite the jobs report falling below expectations
The August job number was the worst since January and it was also down significantly from July, when the economy added 943,000 jobs for an unemployment rate of 5.4%.
The Federal Reserve is closely watching these numbers for signs of how COVID impacted hiring and activity as it considers when to start easing some of the extraordinary measures it put into place during the pandemic.
Federal Reserve Chair Jerome Powell, speaking at the central bank’s Jackson Hole Symposium last week, said Fed officials agreed they should begin to taper their $120 billion-a-month bond buying program this year.
However, he gave the caveat that he’d like to see more progress in the labor market before such a move was made.
So officials will be watching this economic report and the next ahead of the Fed’s Sept. 22 meeting.