Some employers have reduced their hiring due to Americans purchasing fewer flights, staying in fewer hotels, and filling fewer entertainment venues, a report said.
After two months of strong hiring, August saw a drop in employment. This is despite the fact that America’s employers added only 235,000 jobs. It also marks the first sign to date that some Americans have stopped shopping, flying, and dining out, which was a surprising result.
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.
Despite the record number of job openings, many employers are still looking for workers. Overall, hiring will remain steady in the future. Despite August’s slow job growth, the unemployment rate fell to 5.2% in August from 5.4% in July. The overall U.S. economy looks healthy, with many Americans still willing to spend and businesses still looking to hire.
However, Friday’s jobs report revealed how the delta variant hampered job growth last month. The most difficult sectors to hire were those that required face-to-face interaction with the public. In August, more Americans stated that they couldn’t work because their employers closed or lost business due to the pandemic than in July.
Sarah House, the senior economist at Wells Fargo, stated that “the delta variant has taken more toll on the labor market than many of you had hoped. It will take workers longer than we anticipated to return to the labor force.”
Many economists and officials at the White House, Federal Reserve, expected that a fading pandemic would encourage more people to resume job search. They hoped that the fear of getting sick at work would disappear. As schools reopened, more parents, especially women, would return to the workforce.
This has not happened yet. Many economists predict that the Fed will delay announcing that it will withdraw the extraordinary support it provided to the economy after the pandemic in March last year.
After a total of 400,000 jobs added in June and July, the August hiring in this category (restaurants, bars, and hotels) dropped to zero. OpenTable reports that restaurant dining has dropped to 9%, even though it had fully recovered by June.
Some live shows, including the remaining concerts on country star Garth Brooks’ tour, for example, have been canceled. Some businesses are delaying returning to work, which is threatening the survival and viability of downtown coffee shops, dry cleaners, and coffee shops.
Companies are offering higher salaries because of the difficulty in filling vacant positions. The hourly wage rose by a solid 4.3% in August, compared to a year ago. Walmart for example announced that it would give over 500,000 employees an $1 per hour raise, the report added.
Governors in about 25 states, nearly all led by Republican governors, cut off a $300-a-week in federal supplemental unemployment benefits in June and July because, they said, the extra money was discouraging recipients from looking for work. According to Friday’s report, the August report showed that there was no change in the percentage of Americans looking for work or having jobs.