Post Covid Delta Variant impact on US job market

In US, unemployment rate was continuously falling still now, according to the US Bureau of Labor Statistics, last time the rate was high in April 2020. There was notable job recruitment in August in the professional and business services, transportation and warehousing, private education and manufacturing. But, still it couldn’t compete with the expected level recovery from the pandemic.

Even, US economy gained fewer expected jobs in August than previous month of July. Though, August employment rose by 235,000 as US unemployment rate fell in August 5.2% from 5.4% in July.

However, US job market was well down on the 1.05 million jobs created in July. As it seems disappointing, but it might not be totally negative. The situations will have started to change and employment situations will also positively grow.

Economists said that, US faced a rising infections caused by the Covid Delta variant which have hit poor spending on travel, tourism and hospitality. 

US President Joe Biden said, “he was disappointed but defended his record on the economy, saying it was growing consistently. Total job creation in the first seven months of my administration is nearly double, double any prior first-year president,"

He also said. “While I know some wanted to see a larger number today, and so did I, what we've seen this year is a continued growth, month after month in job creation." 

However, unemployment rate in leisure and hospitality sector was remain flat as it increased by an average of 350,000 per month over the previous six months. In February 2020, the number of people unemployment rate on US was 5.7 million. While it seems to dropped down to 8.4 million which also remains well above the pre-pandemic level.

Joe Little, chief global strategist at HSBC Asset Management, said “the weak figures could turn out to be a blip, noting that average payrolls growth had averaged at around 700,000 per month over the last three months.”

In August 2021, the average earning also jumped in US which represent that despite labor crises in some industry employers are trying to lure workers back. For this reason, it was clear that labor demand has increased in post Covid Delta Variant impact on US economy.

US labor demand & post Covid impact

After Covid Delta variant impact US labor markers demands will have raising. Experts said that US record levels of job openings means that the demand for labor remain high. May be labor shortages will be eased by the expiry of added unemployment insurance payment plus improved access to childcare when schools will reopen.

But, the true part is that no one knew why employers are having such a hard time to filling jobs when overall employment remains well below its pre-pandemic impact. Since job market has been facing a shortage, employers have to pressure on to raise wages which is also steadily rising. May be, it will be good for those who already have a job.

However, experts saidthat raising wages is not good for them who had a job before the pandemic but aren’t now. Because, if wages raise too much, then employers have to find it’s too expensive to expand their workforce and they have search alternative ways like automation. So, in this situation, re-employing anyone who lost their job during the pandemic would begin to close.

However, hopeful trend is that in 2021 US economy has rebounded strongly from the post Covid situations besides the last years during long period lockdown as down fall the economic growth. Form this frustrating situation, re-joining the workforce was an important risk factor to check.   

As well as, like most of the economy US is facing supply chain issues which dragged on manufacturing growth. However, house price is rising with in residential construction or the jobs associated with it. And corporate results remain strong which seems a positive side on US economy. Thought, after re-opening the economy prices on goods have risen rapidly, while job growth has slowed to a crawl. But, Federal reserve believed that high inflation rate will be stable again when this pandemic crisis will remove and economy will recover entirely.