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Delta Variant Put A Dent In Hiring As Only 235,000 Jobs Were Added In August—Far Below The Expert Prediction Of 720,000 New Hires

By News Creatives Authors , in Leadership , at September 3, 2021

In a surprisingly disappointing August jobs report, only 235,000 jobs were added in August. The numbers fell significantly under the expectations of economists and experts who anticipated 720,000 new hires. It seems, from the data, that the Delta variant took its toll on hiring as both potential workers and companies were concerned about the uncertainty surrounding the virus outbreak. The unemployment rate dipped slightly to 5.2% and the U.S. workforce is down by nearly 3 million people since the pandemic started around February 2020. 

You’d think that hiring would have been more robust given the latest government Job Openings and Labor Turnover Survey (JOLTS) report, which indicated an eye popping 10.1 million job openings. 

Clearly, there is more to the picture. There are more jobs available compared to people out of work. The month saw an increase of about 400,000 in those who said they couldn’t work for pandemic-related reasons, pushing the total up to 5.6 million. Some of the reasons for the lack of hiring include heightened health risks associated with the Delta Variant and talk of possible new strains of Covid-19, concerns over finding childcare, not knowing if public schools will remain open and enhanced government benefits.

We’ve also seen an unprecedented change in the way people view work. Over 4 million Americans quit their jobs in the “Great Resignation” trend. People are reevaluating what they want in a job and career. Job seekers desire opportunities that offer fulfillment and meaning.  They are quick to quit if they’re dissatisfied. 

On the other side of the equation, while some companies are making overtures to entice workers to join their businesses, many others aren’t enhancing wages, improving working conditions and are too strident in their demands of what experiences job applicants should have. If  a person’s résumé isn’t deemed to be a perfect match, hiring managers will demure and keep searching for the perfect candidate that doesn’t exist. Anecdotally, I see this all the time in my recruiting practice. There continues to be a debate over hybrid, in-office and remote-work models. Corporations are also preoccupied with figuring out their return-to-office plans. Apple, Google, Amazon, Microsoft and other companies have pushed back plans due to the Delta variant.

The lack of visibility of how things will play out has made businesses pause hiring and potential workers sit on the sidelines. Covid-19 is weighing down job growth and August’s jobs report was the worst since January. 

The plummet in hiring at restaurants and bars seems unbelievable. One of the main factors contributing to the major miss on payroll growth was an abrupt breakdown in hiring in the U.S. services sector, which had previously been stellar. Leisure and hospitality industries added zero people in August.  

Here are some of the other highlights of August’s jobs report:

  • On the positive side, the previous two months saw substantial upward revisions with July’s total now at 1.053 million, up from the original estimate of 943,000. June was bumped up to 962,000 from 938,000. For the two months, revisions added 134,000 to the initial counts.
  • Notable job gains occurred in professional and business services, transportation and warehousing, private education, manufacturing and other services. Employment in retail trade declined over the month.
  • Employment in financial activities rose by 16,000 over the month with most of the gain occurring in real estate (+11,000). Employment in financial activities is down by 29,000 since February 2020. 
  • Transportation and warehousing added 53,000 jobs in August, bringing employment in the industry slightly above (+22,000), its pre-pandemic level in February 2020. Employment gains have been led by strong growth in couriers and messengers and in warehousing and storage, which added 20,000 jobs each in August. Air transportation also added jobs (+11,000), while transit and ground passenger transportation (which includes school buses) lost jobs (-8,000). 
  • The number of long-term unemployed (those jobless for 27 weeks or more) decreased by 246,000 in August to 3.2 million, but is 2.1 million higher than in February 2020. These long-term unemployed accounted for 37.4% of the total unemployed in August. 
  • The labor force participation rate—61.7% in August—was unchanged over the month and has remained within a narrow range of 61.4% to 61.7% since June 2020. 
  • The number of long-term unemployed (those jobless for 27 weeks or more) decreased by 246,000 in August to 3.2 million, but is 2.1 million higher than in February 2020. These long-term unemployed accounted for 37.4% of the total unemployed in August. 
  • In August, 5.6 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic—that is, they did not work at all or worked fewer hours at some point in the last four weeks due to the pandemic.

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