US employment growth rose solidly in July amid labor demand in the labor-intensive service industry, suggesting that the economy maintained its strong momentum at the start of the second half of the year.
The number of non-farm workers rose 943,000 jobs last month after rising 938,000 in June, the Labor Department said in its closely watched employment report on Friday.
Joe Biden welcomed the news, and the President later noted at the White House Friday morning that the report had made the Biden administration the first administration in US history to add new jobs every month for the first six months since it took office .
“It is undisputed that the Biden plan works. The Biden Plan is producing results and the Biden Plan is moving the country forward, ”said the President.
While celebrating on the one hand, Biden also stressed that there was still much to be done to ensure that the country’s economic recovery continued.
In particular, the president said more Americans need to get vaccinated to ensure businesses aren’t forced to close again due to the surge in cases caused by the Delta variant.
Biden outlined the steps his government has already taken to encourage vaccination, including a vaccine mandate for federal employees and funding to the states to incentivize vaccination.
“America can beat the Delta variant, just like we beat the original Covid-19,” said Biden. “We can do it. So wear a mask if advised. Get vaccinated today. All of this will save lives and means we will not suffer the same economic damage we saw at the start of Covid-19.” to have.”
Economists polled by Reuters had forecast that the number of employees will increase by 870,000 jobs. However, the job growth was flattered by shifts in seasonal school employment due to Covid-19. Estimates range from as low as 350,000 up to 1.6 million.
However, the job growth was flattered by shifts in seasonal school employment due to Covid-19.
The unemployment rate fell from 5.9% in June to 5.4%.
“Labor market conditions appear healthy as we enter the third quarter as labor-intensive service companies continue to recruit with pent-up demand,” said Sam Bullard, senior economist at Wells Fargo in Charlotte, North Carolina.
Before the pandemic, education employment typically fell by around 1 million jobs in July as schools closed, but this year many students in summer school are catching up after the disruptions caused by the coronavirus. This likely dismissed the model or seasonal factors the government uses to filter seasonal variations out of the data, which gave payroll a boost.
“Combined with the expansion of summer school programs in several major school districts across the country, the seasonal adjustment process gave another big boost to payrolls in July,” Bullard said.
The strong employment report followed last week’s news that the economy fully recovered in the second quarter from the sharp loss of output it suffered during the very brief pandemic recession. Economic growth of around 7% is expected this year, the fastest since 1984.
Labor market health will weigh heavily on the Federal Reserve’s next monetary policy moves.
“Strong readings in the next few months seem to give the green light for an advance notice of tapering at the Fed meeting in September,” said James McCann, deputy chief economist at Aberdeen Standard Investments in Boston.
A labor shortage has left employers unable to fill a record 9.2 million jobs. The lack of affordable childcare and fears of contracting the coronavirus have been blamed for keeping workers, mostly women, at home. In addition, there were pandemic-related retirements and career changes.
The labor shortage is expected to subside in the fall when schools reopen for personal learning, but some economists are less optimistic, arguing that the economy has created many low-skilled jobs and that there are not enough people to take them in .