The job market stalled in August in the United States, the Delta variant having sharply slowed job creation, an additional blow for Joe Biden, weakened by the Afghan crisis, but a new argument to push his plans for ‘investments.
ATS
Only 235,000 jobs were created last month, three times less than the 750,000 expected by economists, the labor department said on Friday.
The sharp slowdown comes after two solid months: more than a million jobs were created in July and 962,000 in June, according to data revised upwards and also released on Friday.
The monthly job creations make it possible to take the pulse of the American economic recovery. Employment is one of the priorities of the host of the White House, which hopes to get Congress to adopt its gigantic investment plans to ensure sustainable economic growth.
But “the economy cannot recover and fully reopen until the virus is contained – it’s devastating,” responded economist Diane Swonk, Grant Thornton, in a tweet.
“This is just the start of the Delta variant effect,” even warns Ian Shepherdson, economist for Pantheon Macroeconomics.
The variant makes Americans reluctant to go out and consume, or return to work. Many companies that had planned a return to the office in September put it off for several months.
The resurgence of the virus also raises fears of new school closures, barely reopened, which would weigh on the ability of many mothers to return to work.
Inequality
“In August, notable job gains took place in professional and business services, transportation and warehousing, private education, manufacturing and other services,” says the Labor Department in his press release. But retail employment declined as stores were once again deserted by customers.
As for the unemployment rate, which takes into account different data, it continued to decline, to 5.2% (-0.2 points).
Inequalities continue to increase: the unemployment rate for white Americans is steadily declining (4.5%); that of black and Hispanic Americans remains high and stagnant, at 8.8% and 6.4% respectively.
In addition, there are still 5.3 million jobs missing compared to February 2020, just before the start of the pandemic.
Paradoxically, employers are still struggling to find candidates for positions with the lowest salaries: restaurant waiters, “school bus” drivers, or logisticians. The shortage pushed wages up in August for the fifth straight month.
The wait-and-see Fed
At the same time, several million Americans will be without any unemployment benefit from Monday. The additional aid, paid since the start of the pandemic, is indeed expiring, now depriving the long-term unemployed, for example, or the self-employed, among others.
However, do not expect “an immediate increase in employment,” Nancy Vanden Houten, economist for Oxford Economics, said Thursday. According to her, this will weigh more on household income and spending, ”risking a slowdown in consumption, the engine of the US economy.
These bad figures are not likely to push the US Central Bank to reduce its support for the economy.
Its president, Jerome Powell, has in fact repeatedly said that the reduction in aid would be conditional on a full recovery in employment.
So Mr. Powell should want to watch the situation for a bit longer. The announcement could not arrive until December, according to Ian Shepherdson, who even thinks that the Fed “could easily be forced to wait until January”.
Since March 2020, the monetary institution has been purchasing $ 120 billion worth of treasury bills and other securities each month. It will then raise its key rates, which are currently close to zero.
–
