June 2021 Jobs Report: Delta Variant Could Complicate Reopening Plans
The trajectory of the US economy will become clearer on Friday morning when the government reports on hiring and unemployment in July.
Economists are looking for a gain of more than 800,000 jobs, but data was collected in the first half of last month, before cases of coronavirus caused by the Delta variant increased in many parts of the country.
While the economy and overall job growth have been strong in recent months, experts fear the spread of the variant will undermine those gains if further restrictions become necessary. Already, some events have been canceled and many companies withdrew from plans to return employees to the office in September.
“A lot of things depend on this report,” said Scott Anderson, chief economist at Bank of the West in San Francisco. “It’s been a sprint in terms of growth, but maybe we are heading for a marathon. The travel season is drawing to a close and the Delta variant is a big concern. “
A consensus of economists polled by Bloomberg calls for a gain of 858,000 jobs, with the unemployment rate falling to 5.7% from 5.9% in June. Yet there is a wide range of estimates, from less than 500,000 to over a million hires.
One of the sources of strength in July’s numbers is expected to be education, with schools bracing after being closed in some cases since the start of the pandemic.
Local governments created 155,000 education jobs in June, and the July increase could be even larger as more teachers are hired, according to Lydia Boussour, senior US economist at Oxford Economics. Leisure and hospitality are also expected to show strong growth, she said.
“The outlook for the labor market remains quite positive as we approach the second half of the year, but what happens on the virus front will be critical to watch in terms of downside risk,” Boussour said.
Growth is expected to be more subdued in the manufacturing and construction sectors, both being held back by supply shortages, including high lumber prices and a lack of semiconductors for automakers. “It would be nice to see some progress, but we don’t expect an increase there,” said Nick Bunker, director of economic research at recruitment site Indeed.
Despite the hiring gains, many managers report difficulty finding candidates for vacant positions. Jeanine Lisa Klotzkin operates an outpatient drug treatment center in White Plains, NY, and has had limited success in her search for addiction counselors.
“Normally we would have dozens of candidates,” she said. But six weeks after posting a job posting online, his clinic received four applications. The Posts pay $ 50,000 to $ 63,000 per year, said Ms. Klotzkin, who added, “These are not low-paying jobs. I don’t know where people went.
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