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The U.S. economy roared in the middle of the summer with a surge in hiring, but questions are raised about its ability to maintain that momentum as there is growing concern about the Delta variant of the coronavirus.
Employers created 943,000 jobs in July, the Labor Department reported on Friday, but data was collected in the first half of the month, before variant cases exploded in many parts of the country.
While the economy and overall job growth have been strong in recent months, experts fear the spread of the variant will undermine those gains if further restrictions become necessary. Already, some events have been canceled and many companies withdrew from plans to return employees to the office in September.
Still, with schools planning to reopen, at least for now, and Americans continuing to dine and travel, the expansion of the economy stayed on track last month. Some experts predict a slight cooling on the horizon, but most believe unemployment will continue to fall as the labor market recovers the ground lost in the pandemic.
“Sectors linked to the reopening of the labor market are leading the way, giving hope that these gains can continue in the months to come,” said Nick Bunker, director of economic research at Indeed Hiring Lab. “However, the Delta variant poses a risk to the pace of progress.”
It was the best monthly performance since August 2020 and underlined how far the recovery has come, at least until the appearance of the Delta variant.
In remarks from the White House, President Biden hailed the report as a sign the economy could weather the pandemic, partly crediting his administration’s efforts to encourage workers to get vaccinated against the coronavirus.
“We will undoubtedly have ups and downs along the way as we continue to fight the Delta wave of Covid,” Mr Biden said. “What is indisputable now is that the Biden Plan is working, the Biden Plan is producing results, and the Biden Plan is moving the country forward.”
The unemployment rate fell to 5.4% from 5.9% in June. Prior to the report, the consensus of economists polled by Bloomberg predicted a gain of 858,000 jobs, with the unemployment rate falling to 5.7%.
“This is an excellent report, very solid in terms of job growth, wage growth and falling unemployment rate,” said Gus Faucher, chief economist at PNC Financial Services in Pittsburgh. “I don’t see the Delta variant derailing the recovery.”
The education arena, often lagging behind in July as schools close and teachers lose payrolls, was a leader last month. Instead of letting teachers go as in the past, schools kept more workers on the payroll, creating a larger seasonal adjustment to the increase in the number of teaching positions.
The local government created 221,000 jobs in education, after a jump in June, and 40,000 jobs were added in private education. Leisure and hospitality businesses, which were hit hard by closures last year, have rebounded again, creating 380,000 jobs. This included 253,000 in food and beverage establishments, as well as hiring gains in accommodation and the arts, entertainment and recreation.
Manufacturing and construction posted more modest increases, hampered by rising prices for goods and a shortage of components like semiconductors. Employment in professional and business services jumped by 60,000, a sign that the white-collar industry is on the rise.
Additionally, upward revisions for May and June completed the positive picture, with the Bureau of Labor Statistics increasing May’s gain by 31,000 and June’s increase by 88,000.
“The business is amazing,” said Tom Gimbel, managing director of LaSalle Network, a recruiting and staffing company in Chicago. “Companies continue to hire salespeople in numbers that I have never seen. It shows me that businesses are very optimistic about the future.
“We are seeing demand for seniors, but it’s not crazy,” he added. “The huge demand is for entry to the middle level, with salaries ranging from $ 45,000 to $ 90,000. It is the rebirth of the middle manager.
Despite the hiring gains, many managers report difficulty finding candidates for vacant positions. Jeanine Lisa Klotzkin operates an outpatient drug treatment center in White Plains, NY, and has had limited success in her search for addiction counselors.
“Normally we would have dozens of candidates,” she said. But six weeks after posting a job posting online, his clinic received four applications. The Posts pay $ 50,000 to $ 63,000 per year, said Ms. Klotzkin, who added, “These are not low-paying jobs. I don’t know where people went.
Katie rogers contributed report.
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