America’s private employers in July added 943,000 jobs—a proxy for new hires—in a sign that the U.S. economy enjoyed a solid burst of job growth as the labor market recovery continues.
Ahead of the release, economists’ estimates varied widely—from 350,000 to as much as 1.6 million, according to a Reuters review of institutional forecasts.
Driving the uncertainty are the dynamics of the pandemic, particularly the spread of the Delta variant of the CCP virus, which the Centers for Disease Control and Prevention (CDC) considers more transmissible and potentially more resistant to vaccines.
But while the resurgence in COVID-19 infections poses a risk to economic recovery, there’s no sign yet of any significant impact.
“While the Delta variant has sparked a rise in COVID cases, there’s scant indication this is translating to a measurable reduction in economic activity in the U.S. so far, suggesting little meaningful impact on employment,” Bankrate senior economic analyst Mark Hamrick said in an emailed statement to The Epoch Times.
While economic output has fully bounced back to its pre-pandemic levels, the labor market recovery is trailing. After shedding over 22 million jobs in the first two months of the pandemic, the U.S. economy has since recovered nearly 17 million jobs.
The Labor Department’s jobs report also showed that the unemployment rate dropped by 0.5 percentage points to 5.4 percent in July, while the total number of unemployed persons fell by 782,000 to 8.7 million.
While these measures are down considerably from their highs at the end of the February–April 2020 recession, they remain well above their pre-pandemic levels of 3.5 percent and 5.7 million in February 2020, the Labor Department said.
The brisk economic recovery has also driven down the number of American workers seeking unemployment benefits, which last week fell to a pandemic-era low, although the number remains historically elevated.
Initial filings for unemployment insurance, a proxy for layoffs, came in at 385,000 for the week ending July 31, a drop of 14,000 over the previous week’s revised level, the Labor Department said in a statement (pdf) on Aug. 5.
While the drop in initial jobless claims reflects the dynamics of a rebounding economy, the number of last week’s filings is nearly twice as high as the pre-pandemic weekly average of around 220,000, suggesting the labor market still has a ways to go in its recovery.
“It was about a year ago when new claims first fell below the 1 million level for the first time after the pandemic began. In total, some 12.9 million Americans continue to receive some form of jobless assistance, which remains historically elevated,” Hamrick said.
Some Republicans and economists have blamed generous unemployment benefits—in particular, the federal pandemic jobless compensation boost—for sidelining workers by discouraging them from taking jobs.
“With jobless claims remaining high, the administration must reexamine their policies holding the economy back & prioritize getting Americans back to work,” Sen. Jim Risch (R-Idaho) said in a statement.
American businesses posted a record 9.2 million job openings in May, faster than applicants are showing up to fill them. In the face of business hiring difficulties, some two dozen states have moved to end early their participation in the extended federal unemployment programs.