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Job Market Recovery Strengthens, War for Talent Heats Up

By D. Mark Wilson posted 08-06-2021 14:03

  

Employers added 943,000 jobs in July after adding 938,000 jobs in June as the unemployment rate dropped to 5.4%, however, the numbers predate the rise in Delta variant cases.

The number unemployed dropped by 782,000, the largest monthly drop since October 2020, and 261,000 people joined the labor force.  In addition, the number of long-term unemployed (27+ weeks) dropped by 560,000.

There are still 5.7 million fewer jobs in the U.S. than before the pandemic and 1.5 million more people who say they want a job are not in the labor force.

The war for talent heats up—more job openings than unemployed Americans:  There are 8.7 million Americans unemployed and 9.2 million job openings, which suggests there is a serious mismatch between the types and locations of jobs employers need to fill and the types of jobs Americans are looking to move into.

Wages increasing but workers are worse off:  Real average hourly earnings decreased 1.7% from June 2020 to June 2021, and real average weekly earnings decreased 1.4% as inflation outstripped wage gains.

Six industries accounted for three-quarters of the jobs added in July, including:

  • Bars and restaurants (+253,200),
  • Local government education (+220,700),
  • Hotels (+73,700),
  • Professional and business services (+60,000),
  • Arts, entertainment, and recreation (+53,000), and
  • Education services (+40,000).

Most other industries were little changed.

Looking ahead:  At the current pace of job growth, it will take until April 2022 before all of the jobs lost to COVID are restored.  Economists are forecasting continued job gains, but the Delta variant may slow job growth over the next two or three months.

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