Despite the Delta variant becoming more of an issue, the economy keeps recovering at a solid pace. Last year, amid the worst of the pandemic, unemployment rose to almost 15% nationwide. For the month of July, hiring rose at its fastest pace in almost a year. The economy is slowly trying to shake off the effects COVID-19 has had on it.
The job growth in July of this year is the highest since August of 2020. Since August 2020, the market has not added over one million jobs in a month. In April of 2020, the job market lost 21 million jobs after losing two million the month prior.
However, the numbers are looking good as the summer starts to come to a close. The education sector added 261,000 new hires which showed strong gains. Employees are also making more money than before. Average hourly earnings are up 0.4% in the last month. Wages have also increased 4% from the same period from last year.
Overall, unemployment fell by more than estimated. Not only did economists only expect 845,000 new jobs, they expected a 5.7% unemployment rate. In reality, the economy added 943k jobs and the unemployment rate dropped to 5.4%. Even labor force participation has increased. Despite the worries over inflation and other scares, the economy seems to keep healing.
Hospitality jobs are a big cause for concern. The service industry took the hardest hit in the pandemic. That market has added 380,000 jobs with 253,000 coming from bars and restaurants. A year ago, the unemployment rate in the industry rose to 25%. In June, the rate was still 10.9%, but July brought good news. The unemployment rate for the hospitality industry fell to 9%.
Unemployment Rate, Jobs Numbers are Optimistic
While the unemployment rate numbers are optimistic, there are still concerns. The Delta variant is spreading at a concerning rate. That has many in fear that the economy could be slowed down again with hospitalizations increasing.
There would need to be a dramatic change for the economy to come to another halt. However, regional areas could come to a close depending on local governments. Meanwhile, some believe there is a cap to the good economic news. At least as far as jobs go. The American economy is still going through a scarcity of labor.
However, by the time the next month’s job numbers are in, there could be more good news from July. The last two months, June and May, were both revised after the fact. June jobs increased by 88,000 after the initial reports came out.
If the trend continues, July could be the first month since August 2020 with over one million jobs added. It seems the economy is going to keep healing despite worries about inflation, labor scarcity, and other issues that have arisen in the last year.