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The trajectory of the American economy will become more clear on Friday morning, when the government will report on hiring and unemployment in July.
Economists are looking for more than 800,000 job gains, but data were collected in the first half of last month before cases of coronavirus caused by the Delta variant rose in many parts of the country.
While the economy and job growth have been generally strong in recent months, experts fear the spread of the variant could undermine these gains if new restrictions are necessary. Some events have already been canceled and many companies have withdrawn from their plans for employees to return to the office in September.
“A lot of things hang in this report,” said Scott Anderson, chief economist at the Bank of the West in San Francisco. “It’s been a sprint in terms of growth, but we may be moving towards more of a marathon. The travel season is coming to an end and the Delta variant is a big concern.”
The consensus of economists polled by Bloomberg calls for 858,000 job gains, with the unemployment rate falling to 5.7 percent from 5.9 percent in June. Still, there is a wide range of estimates, from under 500,000 to over a million hires.
A power source in the July figures is expected to be education, with schools closed in some cases since the pandemic hit.
local governments 155,000 training jobs added in JuneAccording to Lydia Boussour, senior US economist at Oxford Economics, the increase in July could be even larger as more teachers are hired. Leisure and hospitality should also see strong growth, he said.
“The labor market outlook remains quite positive as we enter the second half, but what happens on the virus front will be the key to watch for downside risk,” Boussour said.
Growth is expected to be more moderate in the remaining manufacturing and construction sectors, both driven by higher timber prices and shortages of supplies, including a shortage of semiconductors for automakers. “It would be nice to see some progress, but we don’t expect an increase there,” said Nick Bunker, director of economic research at the recruitment site Indeed.
Despite hiring gains, many executives report having difficulty finding applications for open positions. Jeanine Lisa Klotzkin runs an outpatient addiction treatment center in White Plains, NY, and has had only limited success in seeking addiction counselors.
“We would normally have dozens of candidates,” he said. But six weeks after posting an online job posting, his clinic received four applications. Positions pay between $50,000 and $63,000 a year, Klotzkin added, adding: “These are not low-paying jobs. I don’t know where people are going.”
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