However, there is growing concern that the rapidly-emerging delta variant could slow down the recovery.
There is a concern that the resurgent viral could deter people from spending and cause another round of shutdowns and other restrictions.
Rubeela Farooqi (chief U.S. economist, High Frequency Economics) stated that “that is a definite downside danger.” If they aren’t interested in engaging in other activities, the risk comes from a more careful consumer. It’s also common to hear about large companies who delay a return from work. This could be a factor that slows down things.
The Labor Department collected the data for the report mid-July. However, the Centers for Disease Control and Prevention reversed their course and recommended that everyone vaccinated wear masks indoors where the variant is increasing the risk of infection.
The July numbers were still good. They exceeded the forecasts of economists, which predicted that there would be more than 860,000 jobs. In July, 261,000 Americans returned back to work after being encouraged by their prospects. The unemployment rate dropped from 5.9% to 5.9% in June.
The report also found that customers are returning and businesses are scrambling to find workers, which is driving up wages. Last month’s average hourly earnings increased by 4% compared to a year ago.
The Labor Department also updated its job numbers for May/June, adding 119,000 new jobs.
In March and April 2020, the economy lost 22 million jobs. This was due to the coronavirus which caused businesses to close down and individuals to stay at home. The U.S. has now recovered almost 17 million jobs since then, leaving it just short of 6 million.
In a research report, Leslie Preston, senior economist at TD Economics wrote that if the current pace of hiring continues, then all the jobs lost because of the pandemic will be regained within seven months. “But, the pace of hiring is likely to slow down and the risk for the delta variant looms.
These unexpectedly strong numbers are coming at a crucial moment for President Joe Biden’s agenda. The Senate is set to vote on a $1 trillion infrastructure bill this weekend, before moving on to a more-than $3 trillion expansion of social safety net, pushed by Democrats.
Biden stated that the jobs report confirms his efforts to stabilize and slow the spread the virus and encouraged legislators to adopt the remainder of his agenda.
Biden stated, “The bottom line: What we’re actually doing is working.” He added, “We still have a lot to do.”
The average number of COVID-19 new cases in the United States is more than 98,000 per day. This is up from less than 12,000 in June, but still far below the January peak of 250,000. Most new cases are occurring in people who haven’t been vaccinated.
In an effort to protect the economy and beat the virus, more state and local governments have made mandatory the use of masks and vaccines over the last week.
Failure to control the surge could result in more cancellations and closings of events. Schools may also reopen plans, making it difficult to return to work for many parents.
Marty Walsh, Labor Secretary, said that the next 10-14 days will be crucial to control it. We need to get more people immunized. We need to comply with mask mandates where they are in effect.
