According to the Labor Department, the U.S. economy added 235,000 jobs in August even though economists had estimated that there would be 720,000 new jobs. The unemployment rate fell from 5.4% to 5.2%, a decrease of 0.2% from July, and the wages increased 0.6% from the last month. The reason why less jobs were added was due to weak hiring in service sector. According to an economist at the Economic Outlook Group, consumers are cautious about spending. This is known to many businesses which is causing them to pull back on hiring. About 5% of events that were scheduled for the coming months have been cancelled and some have been switched to online. As the events are cancelled, businesses don’t have the need for many workers which has resulted in the hiring process slowing down. The pace of job growth is dependent on the direction of Covid-19 as it has already caused uncertainty and that’s why many employers are holding their hiring process. It is also expected that children going back to school will lure parents in the labor force as child-care responsibilities ease, especially for women. Employment at daycare fell during the pandemic because parents were working at home and so were able to look after their children themselves.
As Covid-19 cases rise due to the Delta variant, the job market will be impacted. However, the unemployment rate has declined significantly from July 2020 (10.2%) to August 2021 (5.2%) a decrease of 5%. This decrease is attributed to the availability of the vaccine as it has aided the economy into becoming stable again. If we are able to control the Covid-19 pandemic, the unemployment rate will decrease further and the economy might experience a boost again.
Cambon, S. C., & Morath, E. (2021, September 3). U.S. hiring Slowed sharply in August. The Wall Street Journal. https://www.wsj.com/articles/august-jobs-report-unemployment-rate-2021-11630624394.
2 comments:
It will be interested to see in the next 4 or so how the pandemic progresses as it relates to the job market. I have a feeling that Delta cases will peak in the next month or so, but will that be enough time for people to feel confident enough to join the labor force. It is going to start to get colder as we head into the fall and cases could rise once again. Will employers be able to wait for there employees to come back or will they turn to technology to solve employment issues?
Something that I think should also be mentioned is maybe the unemployment rate is falling because people are not looking for work? Also if the Delta cases continue how many people will continue to stop looking for work?
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