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Feds Report Weak Jobs Numbers

By Staff Writer September 07, 2021

Nonfarm payroll employment increased by just 235,000 in August, after a revised increase of 1,053,000 in July, according to the Bureau of Labor. The published unemployment rate ticked down from 5.4 to 5.2 percent, and the true rate, after adjusting for any misclassification error, declined from 5.7 to 5.4 percent.

The number of jobs is still 5.33 million below February 2020 levels, with women representing 56.1 percent of these employment losses. The labor force participation rate remained unchanged at 61.7 percent.

According to Gad Levanon of the Labor Market Institute, the negative effects of the Delta variant on hiring and the economy were apparent in the August nonfarm payrolls. In August, real-time statistics showed a significant drop in spending and mobility metrics on leisure-related categories. And consumer confidence declined in August as well. As a result, (the Sept. 3) jobs report showed slower employment growth in in-person services. After growing rapidly in recent months and being a major contributor to overall job growth, in August there was no change in the number of jobs in the leisure and hospitality sector. In the previous COVID-19 surge from November 2020 to January 2021, employment in leisure and hospitality not only decelerated, but declined, according to The Conference Board.

Meanwhile, wage data revealed that U.S. labor markets remain tight. The unemployment rate continued to fall, and there were no signs that the severe labor shortage is easing. Wages are still increasing very rapidly. Average hourly earnings were up 6.2 percent (annual rate) over the past five months, signaling employers are offering stronger incentives to attract qualified workers. Much of the acceleration in wages comes from the earnings of blue-collar and manual services industries such as leisure and hospitality and transportation.

Looking forward, the ongoing increase in the number of new infections is likely to lead to another subpar payrolls print in September. Toward the end of 2021, these severe labor shortages are likely to ease as enhanced unemployment benefits expire and schools reopen, leading more workers to return to the labor market.

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Last modified on Friday, 10 September 2021 18:23

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