US payroll growth slowed in August, dented by spread of Delta variant 

America’s employers added just 235,000 jobs in August, a surprisingly weak gain after two months of robust hiring at a time when the Delta variant’s spread has discouraged some people from flying, shopping and eating out.

The August job gains the government reported this morning fell far short of the big gains in June and July of roughly 1 million a month. Those increases were revised higher by a combined 134,000. The gains in June and July followed widespread vaccinations that allowed the economy to fully reopen from pandemic restrictions.

Still, the number of job openings remains at record levels, and hiring is expected to stay solid in the coming months. And even though hiring was relatively tepid in August, the unemployment rate dropped to 5.2% from 5.4% in July.

Friday’s report provided numerous signs that the delta variant had a depressive effect on job growth last month. The sectors of the economy where hiring was weakest were mainly those that require face-to-face contact with the public.

Hiring in a category that includes restaurants, bars and hotels, for example, sank to zero after those sectors had added roughly 400,000 jobs in both June and July. With COVID-19 cases having spiked this summer, Americans have been buying fewer plane tickets and reducing hotel stays. Restaurant dining, after having fully recovered in late June, has declined to about 10% below pre-pandemic levels.

The slowdowns in travel and dining out meant that employers had less reason to add jobs in those areas. And many job hunters were likely reluctant to take public-facing jobs as the delta variant has spread. Health care and government employers also cut jobs in August. Construction companies, which have struggled to find workers, lost 3,000 jobs despite strong demand for new homes.

Government employers shed 8,000 jobs, mostly because of a sharp declines in local education hiring after strong gains in June and July. That decline reflected, at least in part, volatile hiring patterns around education as schools prepared to reopen amid the pandemic. Read the full story.