The American economy added just 235,000 jobs in August, while analysts expected 720,000 jobs to be added. Remarkably, concerns of the delta variant of the COVID-19 rise at the virus situation are weighing on economic growth.
According to Friday’s release of monthly data from the Bureau of Labor Statistics, the unemployment rate declined to 5.2% from 5.4%.
Remarkably, weekly initial jobless claims released Thursday dropped to 340,000, a pandemic-era low. However, private-sector job growth published by payroll processor ADP on September 1 badly undershot economists’ estimates, coming in at 374,000, while 600,000 had been anticipated.
As we know, August was bracketed by natural disasters. The month witnessed a sharp rise in the COVID-19 driven by the highly transmissible delta train accelerated in August. Moreover, it is weighing on consumer behavior and confidence.
August witnessed the catastrophic Category 4 Hurricane Ida laying waste to buildings and infrastructure across New Orleans. Remarkably, it also churned up the Eastern Seaboard with a payload of record-breaking rainfall that paralyzed much of the New York City metro area.
Coronavirus infections have sharply boosted in the last weeks
Confirmed COVID-19 infections have increased nearly 20% in the last two weeks. Meanwhile, coronavirus deaths almost doubled during that period. The worsening public health outlook makes people more cautious about travelling and eating out and reducing the need for workers.
Additionally, restaurants and bars cut 42,000 jobs last month after adding 253,000 in July. Moreover, retailers cut 29,000 jobs in August.
The University of Washington forecasts that between now and December 1 there will be 100,000 COVID-19 death. Remarkably, it is more than in the same period last year, when a wave of winter infections hit the world and vaccines were unavailable.
Homebase, which makes scheduling software for small companies, witnessed a notable fall in hours worked in August — especially in the entertainment and hospitality industries.
Notably, the slowdown in its data was pronounced in the southeast, where coronavirus infections are especially high. New England, where infection counts are lower, fared somewhat better.
The spike in new infections has also discouraged some individuals from returning to work. Remarkably, it threatens to disrupt in-person schooling, which could make it harder for parents to hold down jobs.
Additionally, warehouses and delivery services added 53,000 jobs in August — as the online retail business expand.
Factories added 37,000 jobs in August, up from 27,000 the month before.
Wages have been increasing, especially in restaurants and hotels. However, prices have been rising too, eroding workers’ buying power. Private sector wages in August were up 4.3% from a year ago.