Employment in the United States grew much weaker than expected in August. According to the US Department of Labor figures, employment increased by 235,000 in the world’s largest economy. On average, economists had expected an increase of 733,000 new jobs.
It is the weakest job growth in seven months. However, in July, there was still growth of more than 1 million jobs in the US. According to economists, employers may have become more reluctant to hire new staff due to uncertainty due to the advance of the Delta variant of the coronavirus. But many employers also struggle to find staff, which slows down job growth.
The jobs report plays an important role in the Federal Reserve’s monetary policy, the umbrella of central banks in the US. If the labour market recovery from the corona crisis weakens, the Fed can maintain its support measures for longer. However, Fed Chair Jerome Powell said a week ago that the labour market is far from having recovered from the pandemic. There are still millions of fewer jobs in the US than before the virus outbreak.
The unemployment rate in the US fell to 5.2 percent from 5.4 percent in July. In April last year, during the corona pandemic, the unemployment rate in the US peaked at 14.8 percent.
Lately, there have been more signs that the US economic recovery is starting to weaken due to the Delta variant and supply chain problems for the US industry. In addition, US consumer confidence fell in August.