Companies did not add nearly as many jobs as expected in August as the Delta variant continued to surge across the country. The U.S. Labor Department said that nonfarm payrolls increased by 235,000 workers last month, well below the 728,000 jobs that economists were expecting. It was the lowest number of new jobs added to the economy since January.
“The labor market recovery hit the brakes this month with a dramatic showdown in all industries,” Daniel Zhao, senior economist at jobs site Glassdoor, told CNBC. “Ultimately, the Delta variant wave is a harsh reminder that the pandemic is still in the driver’s seat, and it controls our economic future.”
Most of the jobs gains were seen in professional and business services, which hired 74,000 new people. In addition, there were 53,000 new jobs in the transportation and warehousing industry, while private education and manufacturing saw 40,000 and 37,000 new jobs, respectively.
The biggest job losses were felt by retailers, who lost 29,000 workers during the month of August.
Despite the low number of new jobs, the unemployment rate fell from 5.4% to 5.2%, which was right in line with estimates from many economists.
While the U.S. economy has recovered from the early days of the coronavirus pandemic when most states were completely locked down, the number of workers is still down by 5.3 million from February 2020.