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US Jobs Report Misses Forecasts in Hiring Downshift

Hiring stalled more than expected in August, with the addition of new 235,000 jobs after totaling 962,000 in June and 1.05 million in July, according to the U.S. Bureau of Labor Statistics (BLS) weekly report on Friday (Sept. 3). The unemployment rate dropped 0.2% to 5.2% from July’s 5.4%.

Economists surveyed by Reuters forecast that jobs would increase by 750,000 in August, whereas Bloomberg’s survey of economists anticipated 733,000 new positions, both news outlets reported. 

See also: Jobs Up, Unemployment Down; Hospitality Leading

On average, 586,000 jobs were added each month in 2021, per the BLS report, with August seeing a gain of 74,000 jobs in professional and business services sectors, and 19,000 jobs in architectural and engineering services. Employment in leisure and hospitality was unchanged, after increasing by an average of 350,000 monthly since February.

Computer systems design and related services saw 10,000 new jobs added, and scientific research and development services were up 7,000. Transportation and warehousing added 53,000 new jobs, and the air transportation industry added 11,000 jobs. 

Retail and trade declined in the number of new positions added, as did transit and ground passenger transportation, which includes school buses, according to the report.

“Delta (variant of COVID-19) is a game-changer,” Diane Swonk, chief economist at Grant Thornton, an accounting firm in Chicago, told the New York Times. “It’s not that people are laying off workers in reaction to Delta, but people are pulling back on travel and tourism and going out to eat, and that has consequences.”

In 2020 and in several years prior, initial August payrolls missed expectations and have historically been sluggish when compared to the three-month average addition of new positions through July, Reuters reported.

Read more: ADP: 692K New Jobs Added From May To June 

“COVID effects may make this comparison to the trend less useful, however, August payrolls have been revised higher with the subsequent two jobs reports in 11 of the last 12 years, including last year,” Conrad DeQuadros, senior economic advisor at Brean Capital, told Reuters. 

Some 5.6 million people reported they were unable to work because of the pandemic, up from 5.2 million a month earlier, the Labor Department said.

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