Unemployment rate fell to 4.8%
Economists and business leaders say this summer’s spread of the delta variant, a particularly contagious strain of COVID-19, will potentially hamper job seekers and rapid job growth in September.
“An increase in production may be necessary, but you can’t find employees to increase it,” said Ann Silver, head of the local chamber of commerce in Reno, Nev. “We’re hearing that from every sector – hospitality and touring, healthcare, you name it. People are not getting through. Everyone is in a hurry to say, ‘Wow, the economy is turning.’ Well, it cannot happen without humans.”
Employers across the country appear eager to hire. Labor Department data shows there were nearly 11 million unfilled jobs at the end of July, the highest on record and more than the number of unemployed workers seeking jobs. There were about 5 million fewer jobs in the US in August than in February 2020.
Employers are increasingly holding on to the workers they have, with layoffs dwindling across America. Applications for initial jobless claims fell to 326,000 last week from 38,000 last week, the Labor Department said on Thursday, a pandemic nearing its end.
The unemployment rate is higher than the pre-pandemic level of 3.5%. But other measures – primarily, wage increases – suggest the labor market is tight. Labor Department data shows the average hourly wage of private sector workers climbed 4.3% in the year through August, as employers raised wages to compete on a shrinking pool of workers.
At Great Basin Brewing Co.’s two restaurants in the Reno, Nev., area, managers have increased chefs’ salaries by 30% since January, said co-founder Tom Young, who recently sold the company to private investors. . Diners have returned to restaurants in large numbers this year, but instead of the usual 180 patrons in each store, they will only seat a maximum of 150 due to a shortage of kitchen staff, Mr. Young said. The company wants to hire 10 people. “There aren’t enough staff to move around here,” said Mr. Young.
The labor force participation rate—or the share of workers with or actively looking for a job—was 61.7% in August, up from 63.3% in February 2020.
The number one reason people avoid the workforce is the fear of catching the coronavirus, according to an August survey from job-search website Indeed. Other factors include stay-at-home parents looking after children while some schools remained closed this year.
Economists point to at least two reasons why they think job growth spiked last month. One is that many school districts reopened and potentially hired workers such as cafeteria workers and bus drivers. Reopening can also help parents, especially mothers, return to work. Economists say that with the recent decline in Covid-19 cases and an increase in vaccination rates, more workers may return to the labor force.
In fact economist Nick Bunker said, “If the previous decline in the number of cases is any guide, more people will return to the labor force as the pandemic subsides.”
Josh Mitchell at [email protected]