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Despite the Delta variant, the economy added 943,000 jobs last month

The unemployment rate dropped to 5.4%

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Photo (c) sefa ozel - Getty Images
Businesses continued a rapid pace of rehiring in July. The Labor Department reports that the economy added 943,000 jobs last month, better than most economists expected. Perhaps even more notable, the nation’s unemployment rate dropped a half-point to 5.4%, the lowest since the pandemic began.

The consensus estimate from economists was for 845,000 new jobs. Total non-farm payrolls beat that by nearly 100,000 despite the fact that the Delta variant was spreading quickly during the month.

The number of unemployed persons fell by 782,000 to 8.7 million. One factor may have been an action taken by 24 states that ended enhanced unemployment benefits early. The extra $300 a week in benefits is scheduled to end next month.

“Strong job growth continued in leisure and hospitality, which added 380,000 jobs in July. Employment gains continued in food services and drinking places,  accommodation, and arts, entertainment, and recreation,” said William Beach, commissioner of the Bureau of Labor Statistics.

Restaurants and bars added 253,000 jobs during the month, hotels added 74,000 jobs, and arts, entertainment, and recreation businesses hired 53,000 people. There was also a surge in government employment last month, primarily in the area of education. Across the country, more school districts prepared for the fall term and a return of students to the classroom. Local government education added 221,000 jobs, while private schools added 40,000.

Remote work declined slightly

The report also showed 13.2% of employed persons teleworked because of the coronavirus pandemic. That’s down from 14.4% in June, suggesting that more offices reopened despite the spread of the Delta variant. 

Health care added 37,000 jobs in July, most of them at clinics and doctors’ offices. Factories added 27,000 jobs last month but remain nearly a half-million below pre-pandemic levels. Information services added 24,000 over the month, with three-quarters of the gain coming in the motion picture and sound recording industries. Overall, that sector is down by 172,000 jobs since February 2020, just before the pandemic began. 

The trend of workers getting higher wages also continued last month. In July, average hourly earnings for all employees on private nonfarm payrolls increased by 11 cents to $30.54, following increases that occurred over the prior three months.

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