WATCH: Biden talks job gains in July
WASHINGTON (AP) – U.S. employers created 943,000 jobs in July and lowered the unemployment rate to 5.4%, another sign the economy is rebounding with surprising strength from COVID-19. But there are growing concerns that the fast-spreading delta variant will delay the recovery.
Watch the president’s remarks in the player above.
The concern is that the resurgence of the virus could discourage people from going out and spending and triggering another round of closures or other restrictions.
“It’s a definite downside risk,” said Rubeela Farooqi, chief US economist at High Frequency Economics. “The risk comes from a more cautious consumer, if he does not want to engage in outside activities. … You also hear about big companies delaying the return to work. Maybe it’s something that’s slowing things down. ”
The Department of Labor collected its data for the report in mid-July before the Centers for Disease Control and Prevention last week reversed the course and recommended that even vaccinated people resume wearing masks indoors in places where the variant increases infections.
Still, the numbers for July looked good. They exceeded economists’ forecasts for more than 860,000 new jobs. Encouraged by their outlook, 261,000 Americans returned to the workforce in July. And the unemployment rate fell 5.9% in June.
Additionally, the report found that as customers come back and businesses scramble to find workers, they are increasing wages: Average hourly earnings rose 4% last month from the previous year. .
The Labor Department also revised its employment figures for May and June, adding 119,000 jobs.
The economy lost more than 22 million jobs in March and April 2020 in a recession virtually overnight as the coronavirus forced businesses to close and people to stay at home. Since then, the United States has recovered nearly 17 million jobs, which means it is still short of nearly 6 million.
“If the pace of hiring over the past three months continues, all of the jobs lost due to the pandemic would be recouped in seven months,” Leslie Preston, senior economist at TD Economics, wrote in a research report. “However, the pace is likely to slow down a bit and the risk of the delta variant is looming.”
The surprisingly strong numbers come at a critical time for President Joe Biden’s agenda, with the Senate set to pass a $ 1 trillion infrastructure bill this weekend before moving to a more than $ 3 trillion expansion. dollars from the social safety net pushed by Democrats.
Biden said the jobs report validated his efforts to stabilize the economy and slow the spread of the virus, and he urged lawmakers to pass the rest of his agenda.
“The bottom line is this: What we’re doing is working,” Biden said, adding, “We have a lot of hard work left to do.”
The United States averages more than 98,000 new cases of COVID-19 per day, down from less than 12,000 per day at the end of June – although still well below the peak of 250,000 reached in January. The vast majority of new cases involve unvaccinated people.
Over the past week, a growing number of state and local governments and large employers have made masks and vaccinations mandatory, which could help fend off the virus and protect the economy.
Failure to contain the surge could lead to more closings and cancellations of various events and prompt schools to cancel their plans to reopen, making it difficult for many parents to return to work.
“The next 10 to 14 days are going to be critical in trying to get it under control,” Labor Secretary Marty Walsh said. “We need to vaccinate more people. Where there are mask mandates in place, we have to follow that. “
He added: “It is really important that we take this seriously so that we do not end up in a situation where we have to shut down parts of our country. “
Farooqi said she was optimistic the rebound in employment could continue despite the variant, but withholding her forecast for August because “there are a lot of unknowns right now.”
The vaccine rollout has encouraged businesses to reopen and consumers to return to shops, restaurants and bars. Many Americans are also in a surprisingly strong financial position, as the lockdowns saved them money and government bank relief checks.
As a result, the economy rebounded at an unexpected speed. The International Monetary Fund expects US economic output to grow 7% this year, its fastest pace since 1984. And employers are posting job vacancies – a record 9.2 million vacancies in May – faster than applicants can fill them.
Some companies accuse generous federal unemployment benefits – including an additional $ 300 per week added to the state’s regular unemployment assistance – of deterring Americans from looking for work. In response, many states abandoned federal aid even before it expired on September 6.
Walmart is offering many warehouse workers up to $ 5 per hour more as it tries to hold workers back in the tight labor market.
Layne’s Chicken Fingers, an eight-restaurant chain in Frisco, Texas, raises wages, pays bonuses, provides health insurance and promises young workers a chance for advancement. Two of the four managers of its outlets belonging to the company are 19 years old and another has just turned 20.
“We’re finding that they can handle it – with a lot of oversight,” CEO Garrett Reid said.
The Animal Humane Society near Minneapolis is working to find homes for the animals. He increased wages to $ 15 an hour for employees who care for cats and dogs and help visitors choose pets.
Eileen Lay, the organization’s chief financial and operational officer, knows what she’s up against.
“My 16-year-old son just got a $ 15 an hour job at Target,” she said. “And he doesn’t need to clean the poo.”
Associated Press editors Anne D’Innocenzio in New York and Martin Crutsinger and Zeke Miller in Washington contributed to this report.