U.S. Employment Update
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The U.S. economy created only 235,000 jobs in August, indicating that the more contagious variant of the Delta Coronavirus is affecting recruitment plans, and that worker shortages across the country are still widespread.
The non-farm payrolls data released by the U.S. Bureau of Labor Statistics on Friday marked a significant deceleration from the upwardly revised 1.1 million. Created work In July, it was well below the 733,000 jobs expected by economists in August. After hovering at 5.4% in July, the unemployment rate dropped slightly to 5.2%.
According to data from the US Bureau of Labor Statistics, the leisure and hospitality industry did not increase employment opportunities in August, with an average monthly increase of 350,000 jobs in the past six months.
This extremely weak employment report was released a few days before the expiration of the increased federal unemployment benefit program Pandemic.
Additional assistance, including an additional $300 a week for unemployed Americans, will expire on September 6, when an estimated 7.5 million workers will lose a key source of support. Covid-19 cases are on the rise At an alarming rate in parts of the country.
Republicans have long believed that these measures are preventing people from returning to work, prompting 25 predominantly conservative states to end increased benefits in the summer.
Goldman Sachs economists estimate that if the nationwide increase in welfare expires, employment growth in July will increase by 400,000 people, and it is predicted that the termination of next week will increase employment by 1.5 million before the end of the year.
But other economists say that there are many other reasons that have contributed to the broader labor market shortage, including continuing concerns about Covid-19 infection and childcare issues. So far, states that have cut benefits have not seen any significant changes in employment trends.
The labor force participation rate, which tracks the number of Americans employed or looking for work, did not improve in August, hovering at 61.7%.
Friday’s data was released on the cusp of the Fed’s policy turn, and the Fed is actively debating the amount of stimulus it injected into the financial markets.
Some officials called on the Federal Reserve to announce its plan to reduce its $120 billion asset purchase plan at its September meeting, believing that the U.S. economy is currently on a path of sustainable growth, especially in the context of rising inflation and tightening labor markets.
At the Virtual Jackson Hole Symposium for Central Bank Governors held last week, the chairman Jay Powell Support Adjustments will be made before the end of the year, but indicate that further progress in the labor market is needed before stimulus can be reduced. He also cautioned against withdrawing policy support prematurely, which he said would be “harmful” because the job market is still “severely weak” and the pandemic is still raging.
Wall Street investors generally believe that the Fed will announce a reduction in its policy meeting in November, but the timetable may vary depending on the data.
According to official data released this week, the labor market in the Eurozone recovered. The unemployment rate in July fell by 0.2 percentage points from the previous month to 7.6%, the lowest level since May 2020.
Additional reporting by Valentina Rome