This archive report was first published on 4 September 2021.
On Friday, the Labor Department released data showing a disappointing 235,000 jobs added in August, a stark contrast to the one million jobs seen in recent months. The unemployment rate fell to a pandemic low of 5.2%, but the report highlighted the ongoing challenges posed by the world's largest Covid-19 outbreak.
President Biden acknowledged the job numbers fell short of expectations, saying, 'What we're seeing is an economic recovery that is durable and strong.' However, he also emphasized the need for continued efforts, stating, 'We have a lot more work to do.'
The president is pushing for the passage of two massive spending bills, a $1.2 trillion infrastructure overhaul and a $3.5 trillion social welfare package. However, a moderate senator has urged fellow Democrats to delay voting on the latter bill, which cannot pass without his support.
The Federal Reserve is closely monitoring the data, as it could impact when it begins slowing its massive purchases of bonds meant to help the economy weather the pandemic. Chair Jerome Powell has signaled that this could start by year's end.
According to the Labor Department report, the leisure and hospitality sector, which bore the brunt of the pandemic's initial layoffs, had added an average of 350,000 jobs per-month over the last six months. However, in August, it added zero positions.
There was no improvement in the labor force participation rate, which was at 61.7% in August, around the range it has hovered at for more than a year. Adult men and white Americans saw their unemployment rates decline, but joblessness remained widespread for others, including Hispanics, with an unemployment rate of 6.4%, and Black Americans, which saw a 0.6% jump to 8.8% unemployment.
As the Delta variant continues to spread, many states and businesses are imposing mask-wearing requirements and other restrictions. This has led to a rise in the number of people reporting they could not work because their employer lost business or closed due to the virus, which rose to 5.6 million from 5.2 million in July.
According to Ian Shepherdson of Pantheon Macroeconomics, 'September likely will be weak too, and we're becoming nervous about the prospects for a decent revival in October, given that behavior lags cases, and cases are yet to peak.'
Despite the challenges, some industries did add jobs last month, including professional and business services, which rose by 74,000, transportation and warehousing, which gained 53,000, and private education, which added 40,000. A positive surprise was seen in wages, where average hourly earnings rose 0.6% to $30.73 after four straight months of increases.
