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U.S. employers added a paltry 235,000 non-farm jobs in August after adding one million in July and 962,000 in June, the Bureau of Labor Statistics (BLS) reported as it also revised upward the previous two months’ numbers.
The consensus among economists had called for 735,000 new jobs last month, almost three times the actual number created.
In August, the return of the COVID virus prevented as many as 5.6 million people from working, according to figures cited by CNBC, an increase from the 5.4 million found in July.
Also last month, 1.5 million people said fear of the virus kept them from looking for work, a number unchanged from July.
Most of August’s weakness was in public contact industries, such as bars, hotels, and restaurants, which had led the hiring surge over the summer.
Leisure and hospitality added no net new jobs; bars and restaurants dumped 42,000 workers, BLS figures showed.
The number of hours worked at eateries and entertainment venues fell sharply last month, according to HomeBase, which makes time management software for small businesses.
Retailers rid themselves of 28,500 workers, an indication that shoppers are once again hesitating to visit stores, The New York Times noted.
August also showed the first increase since December in the number of people working from home, bad news for downtown businesses that depend on commuters.
The COVID virus’s Delta variant “seems to be the overwhelming factor affecting the labor market right now,” senior economist Daniel Zhao at Glassdoor told Business Insider.
The plunge in hiring is a setback for president Joe Biden, who has staked his presidency on taming the virus and re-igniting the U.S. economy to sustain the infrastructure and social-spending programs he has proposed.
To force people back to work, at least 25 states ended their residents’ access to the $300 weekly federal unemployment benefit, which officially expired 6 September.
The jobs report indicates that those states did not benefit greatly from doing so.
“It’s entirely possible that the withdrawal of [federal] enhanced unemployment benefits led to a small increase in payrolls, but it’s just being completely overwhelmed by Delta,” Zhao said.
Wages continued to rise in August by 0.6 percent compared to July, pushing them up 4.3 percent year over year.
The labor force participation rate stood still at 61.7 percent, the same as in July, still less than the 63.3 percent before the COVID virus arrived.
TREND FORECAST: Previously we warned that the hiring figures were tallied in mid-August and likely do not reflect the full extent to which the spreading virus has damaged the economic recovery.