The August employment data was as flat as a high school student’s performance of “Defying Gravity.”
Employers in the United States added only 235K jobs last month, far less than the 720,000 projected. Hiring was projected to drop from 1100 K jobs added in July to 962 K jobs added in June, but not by this much. It was the tiniest increase in employment in seven months.
What happened: All of our predictions that Delta would stifle the labour market’s revival were realised.
Last month, there were no employment increases in the leisure and hospitality sector, a sector that suffers when Covid fears are high. Over the last six months, it has averaged 350,000 new employment each month.
Other sectors that rely on face-to-face connection suffered as well. 42,000 jobs were lost in restaurants, while 29,000 were lost in retail.
So, which sectors of the economy had an increase in employment? Professional and commercial manufacturing, transportation & services are not as badly hit by the epidemic as the hotel industry is.
In sum, there are 5600K fewer employees in the United States currently than there were before the epidemic.
So, what happens now?
This jobs report snafu will ripple across Washington, D.C.
The Biden government will use it to demonstrate that the economy still requires government assistance, while also advocating approval of a $1.2 trillion infrastructure programme and a $3.5 trillion spending measure.
It may also put off the Fed’s plan to phase off its post-pandemic stimulus measures, which was scheduled to start this Autumn as per the Chair, Jerome Powell.