The level of employment in the United States increased in july, as companies added 943,000 positions of work. The unemployment rate, meanwhile, fell to 5.4%, while the economy continues to recover with surprising vigor after last year’s standstill.
July figures exceeded forecasts of economists from more than 860,000 new jobs. Hotels and restaurants, which reopened and are working at a good pace, added 327,000 jobs last month. Local public schools added 221,000 more jobs.
The number of people who reported having a job increased by one million, reducing the unemployment rate from 5.9% in June.
The economy lost more than 22 million jobs in March and April 2020. Since then, however, it has recovered almost 16 million jobs, which leaves a deficit of 6.8 million compared to February 2020.
Vaccines and aid packages, the keys
The deployment of vaccines has encouraged companies to reopen and consumers to go back to businesses, restaurants and bars that they had avoided for months after the pandemic.
In addition, many Americans find themselves in a surprisingly strong financial condition because the closings allowed them to save money and deposit aid checks from the federal government.
Because of this, the economy has recovered at unexpected speed. The International Monetary Fund expects the United States’ gross domestic product – the broadest measure of economic output – to grow 7% this year, its fastest pace since 1984.
Jobs are emerging – a record 9.2 million job openings in May – faster than they can be filled.
Some companies blame generous federal unemployment benefits – which include an additional $ 300 a week to state aid for the unemployed — to discourage Americans from looking for work.
In response, many states have dropped federal unemployment assistance even before it expires nationwide on September 6.
Many Americans may be kept out of the job market due to persistent health fears, and the problems of getting a nursery at a time when many schools are closed.
Another problem: Many of those who lost their jobs to the coronavirus recession are unable to return to their old jobs.
Rubeela Farooqi, chief US economist at High Frequency Economics, notes, for example, that some 80,000 restaurants have closed since March 2020. In many cases, these displaced workers they must have found new careers.
“Matching the unemployed to job openings will likely be a longer process, as finding a new job, perhaps in a new industry, will be challenging,” Farooqi wrote in a research report.
Farooqi also said the labor market may face longer-term struggles once the temporary labor shortage is fixed.
This is because many companies adapted to working with fewer employees during the pandemic, often using technology that reduced the need for human labor.
Also clouding employment prospects is the resurgence of COVID-19 cases caused by the spread of the highly contagious delta variant.
In the United States there is a average of more than 75,000 new cases per day, compared to less than 12,000 newspapers at the end of June, although it is still well below the 250,000 at the beginning of January.
Boussour of Oxford Economics says that the spread of the delta variant could have “impaired the willingness and ability of workers to return to work.”
Despite this, Boussour doubt it will have a big impact on the July figures, because concern about the virus didn’t intensify until after the Labor Department collected its hiring data last month.