U.S. added 235,000 jobs in August, a massive slowdown
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The U.S. economy added a meager 235,000 jobs in August, while the unemployment rate fell from 5.4% to 5.2%, the government said Friday.
Why it matters: It's the first jobs report to factor in the extent of the COVID-19 surge driven by the Delta variant — showing a massive slowdown in the recovery after July's blockbuster jobs report. Economists had expected 725,000 jobs to be added.
The big picture: The pandemic is far from over, and it's still hobbling the American economic recovery. This weak report will dissuade the Federal Reserve from pulling back on the amount of cash it's injecting into the economy every month.
By the numbers: June saw 962,000 new jobs added, and July did even better with 1.05 million. In August, however, the pace of change slowed dramatically, with a gain of just 235,000 jobs — and none at all in the leisure and hospitality industries.
- The other side: Wage growth was very strong, with earnings rising 0.6% in a single month, or 4.3% on a year-over-year basis. The unemployment rate also continued to decline, hitting a new pandemic-era low of 5.2%.
Between the lines: Each successive wave of COVID-19 does less harm to the economy than the one before.
- As Harvard's Jason Furman points out, the first wave of the pandemic had a lower death toll than we're seeing right now, but caused some 22 million job losses.
- This time around, we're still adding jobs, albeit at a slower rate than a month or two ago.
What they're saying: "The most telling number" in the report is the number of people who don't have a job but want one, tweets Michigan economist Betsey Stevenson. That declined sharply, from 6.5 million in July to just 5.7 million in August.
- In other words: While Delta rages, a lot of Americans have no desire to go out to work.
The bottom line: The recovery won't get back on track until the Delta surge subsides.
