Economy adds 943K jobs; unemployment falls to 5.4 percent

WASHINGTON (thehill): The U.S. added 943,000 jobs in July as a summer rush of travel and recreation spending powered the economy through surging coronavirus cases, the Labor Department reported Friday.

The unemployment rate fell to 5.4 percent in July from 5.9 percent last month, according to the monthly jobs report, as employment growth exceeded the 850,000 consensus job gain projected by economists.

The U.S. was expected to see another strong month of job growth following June’s initially reported gain of 850,000 as consumers spent the summer enjoying activities restricted by the coronavirus pandemic.

The rapid spread of COVID-19 among unvaccinated Americans, along with several red flags from private-sector data, raised questions about the strength of the labor market last month. But the delta variant appeared to have little impact on hiring in July as job growth accelerated for the fourth consecutive month.

More than a third of July’s job gains came from the leisure and hospitality sector as Americans continued to shift their spending away from goods and toward experiences. Restaurants and bars added 253,000 jobs, hotels and resorts added 74,000 jobs and arts, entertainment and recreation added 53,000.

Public schools also added 221,000 jobs in July, though the Labor Department acknowledged that those figures could be inflated by season adjustments and the way COVID-19 upended hiring cycles.

Other industries boasting strong jobs gains included professional and businesses services (60,000), transportation and warehousing (50,000), and health care (37,000), while the retail sector lost 6,000 jobs in July.

The strong jobs report comes at a critical time for President Biden, who has faced growing criticism from Republicans and concern among voters about the potential impact of his economic agenda. While Biden and Democrats enjoyed a wave of support after the March passage of the $1.9 trillion stimulus bill, rising inflation and hiring struggles for small businesses began to weigh on consumer confidence.

But July’s stellar jobs gain, along with substantial upward revisions to the June and May jobs reports, gives Biden and Democrats solid signs of the U.S. economy adapting to a difficult landscape.