The U.S. economy gained 943,000 jobs in July. The numbers are strong, but with new concerns over the Delta variant, economists question how long the strong growth can be sustained. The unemployment rate fell to 5.4%. Year-over-year wage growth was at 4.0%.
943,000: Employers added 943,000 jobs in July.
5.4%: The unemployment rate fell to 5.4%.
4.0%: Wages rose 4.0% over the past year.
July’s jobs report was the best since August of 2020, and beat economist expectations, the New York Times reported. The strongest gains came in the leisure and hospitality sector, which was hardest hit during the pandemic. Additionally, the unemployment rate fell to 5.4% and employment numbers for both May and June were revised upwards, showing strong hiring throughout the summer.
While the report was largely positive, MarketWatch reports that a shortage of workers is still holding back the recovery. While the labor participation rate did tick up in July, many Americans sidelined at the start of the pandemic have yet to rejoin the labor force. Some economists predict that we will see more workers reenter the workforce in the fall when schools reopen. Additionally, as many as 2 million workers retired during the pandemic, with no plans to return to the workforce.
Because the numbers for July were taken during the first few weeks of the month, before cases of the Delta variant surged in parts of the U.S., we don’t know how the variant will impact the economy. The Wall Street Journal reports that in many locations, local governments have reinstated mask mandates, but they have not backed any broad closures. However, the New York Auto Show was canceled and many companies are delaying plans to return to the office over concerns about the Delta variant.