Delta variant slams door on hospitality hiring
Restaurants and bars let workers go after months of robust recovery
Job growth in leisure and hospitality slowed to zero in August, pumping the brakes on an economic recovery that had been revving up all summer.
Including everything from restaurants and bars to hotels and casinos, the leisure and hospitality industry had accounted for half of private-sector job growth in July, when it added 380,000 positions.
But job losses last month at restaurants and bars, as well as tepid hirings at hotels, undid the modest gains made by entertainment venues including at casinos and amusement parks.
Overall the economy added 235,000 jobs last month, well short of the 725,000 that economists had expected. The unemployment rate declined 0.2 percentage points to 5.2 percent.
“There is no question, the Delta variant is the reason why the jobs report isn’t stronger,” President Joe Biden said at a press conference Friday. The data come from a survey conducted each month by the Department of Labor.
Still, the economy has added an average of 586,000 jobs per month since January, the agency noted Friday as part of its data release. A wave of Covid infections from the highly contagious variant last month swept across southern states, including Florida and Texas.
“As hospitalizations and fatalities pick up, that is when people pull back the most … and sure enough it showed up in the data,” economist Diane Swonk told ABC News. She predicted the labor market would get worse before it gets better, with the Delta variant and natural disasters likely to hamper employment in September.
Hirings in July were adjusted upward, to 1.1 million from 943,000.
Gains made in real estate sectors were muted in August, with construction losing several thousand workers and real estate services adding 12,000. Downward momentum in retail accelerated last month, as the sector lost 28,500 workers.
August did see hiring in professional industries including architecture and engineering, which brought on nearly 19,000 workers, but remote work, which had been falling, leveled off. In August 13.4 percent of employed workers did their job remotely due to the coronavirus, little changed from the prior month, the Labor Department reported.