Employers in the United States added 943,000 jobs in July, according to the most recent report by the U.S. Labor Department, with restaurants and bars leading the way, making it the best monthly performance in nearly a year, and accompanied by a sharp drop in the unemployment rate to 5.4 percent, the lowest since the pandemic began.
After sizable jumps in employment in both May and June, the latest numbers reinforce the case that the recovery is proceeding, helped by healthy consumer spending, trillions of dollars in government support and a pickup in business investment.
Leisure and hospitality businesses, which were devastated last year as bars and restaurants closed, were the biggest contributors to July’s hiring, adding 380,000 to their payrolls. That included 253,000 positions in food and drinking establishments, along with jobs in lodging and in arts, entertainment and recreation.
July also produced a substantial increase in education jobs. Instead of letting teachers go as they had in the past, schools kept more workers on the payroll, elevating the seasonally adjusted numbers.
Nearly 2.5 million jobs have been added in the last three months, putting the economy three-quarters of the way toward restoring the 22.4 million positions wiped out at the start of the COVID-19 pandemic.
According to the Department of Labor, the economy still has only filled 75 percent of the jobs lost in the pandemic, with those sectors of the economy with “a lot of face-to-face contact, where there still is a chance of high transmission, still showing some job hesitancy.”
Among those in their prime working-age years, which are defined as 25 to 54, the labor participation rate — those working or seeking work — rose to 81.8 percent from 81.7 percent. The Fed is hoping to see that figure climb back toward its February 2020 level, which was 82.9 percent.
The U.S. Federal Reserve has held interest rates near zero since March 2020, and has been buying up bonds each month, policies meant to keep near-term and longer-term interest rates low and fuel borrowing and spending. The July job gains are expected give the central bank more confidence that the economy is doing well, keeping it on track to announce a plan to slow bond-buying in the coming months.
One area that economists are keeping an eye on in the coming months is the effect of the expiration of pandemic-related unemployment insurance at the beginning of September.
AmChamUS supports all efforts to ensure the U.S. economy returns to pre-pandemic levels so that a robust job market can be maintained.
AmChamUS supports a cogent, fact-based process to weening American taxpayers off federal unemployment benefits previously offered throughout the COVID-19 pandemic as a temporary safety net to mitigate future federal debt burdens.
Coupled with a greater share of American employers increasing wages and benefits for individual employees, AmChamUS believes stronger compensation packages from employers represents the greater long-term solution for American taxpayers and a robust economy.