U.S. Labor Secretary Marty Walsh acknowledged Friday that the U.S. has “work to do” after the release of August’s jobs report, which showed that employers added 235,000 jobs.
“Obviously, I would love to have a bigger number,” Walsh told Spectrum News in an interview Friday. “But if you look at the plan overall, economic recovery plan, since the president has come into office, 4.5 million new jobs added to the economy.”
While the report fell short of economists’ predictions, the unemployment rate fell from 5.4% the month prior to 5.2% — and President Joe Biden praised it as “an economic recovery that is durable and strong”
"While I know some wanted to see a larger number today, and so did I, what we've seen this year is continued growth, month after month in job creation,” Biden said Friday, but he acknowledged “there’s no question” that the highly contagious delta variant resulted in lower figures.
Walsh agreed with the president’s assessment: "The delta variant, I think, is still playing a role in this.”
The August jobs report comes as the U.S. continues to see a rise in new COVID-19 cases, prompting concern that the surge could reverse many hard-fought gains to the economy.
“The delta variant has taken a bigger toll on the job market than many of us had hoped,” Sarah House, a senior economist at Wells Fargo, told The Associated Press. “It’s going to take workers longer to come back to the labor market than we expected.”
The sectors of the economy that required face-to-face contact with the public, including the leisure and hospitality industry, saw no growth after months of strong job gains.
“The last three months, that was our leading number as far as creation of jobs,” Walsh told Spectrum News. “In this month specifically, we really had no growth at all there — so there's an impact there.
“We've done a few surveys looking at restaurants and people not going out to restaurants,” he continued. “I think the delta variant had more to do with it than we quite honestly maybe realized.”
Walsh also conceded that the delta variant might have caused some employers in the hospitality industry to delay hiring more staff.
“They’ve gone through a brutal last 18, 19 months — restaurants and industries like that, you know — and they've been trying to keep their doors open, trying to, you know, be creative, whether it's takeout or do other things across the country to make the businesses work,” Walsh said. “So I think they're all concerned about where we are with the variant.”
Retail also saw significant job loss, a fall of 29,000 jobs, down 285,000 since February 2020, before the COVID-19 pandemic ravaged the economy.
Still, wages continued to climb in August — driven partly by ongoing demand for employees. Average hourly earnings increased by 0.6% from the previous month, and have climbed 4.3% over the past year.
When asked why some might not be returning to the workforce, Walsh said that “people are afraid.”
“They're afraid of the variant, they're afraid of the coronavirus, in some cases,” Walsh said. “In other cases, they have their kids at home and they'd have no place for their kids to be, and they have no one to take care of their kids.
“Making investments in child care is key for the future of America,” Walsh said.
To that point, in his remarks earlier Friday, Biden called for Congress to pass his domestic agenda — the $1 trillion bipartisan infrastructure bill that already has cleared the Senate, and the $3.5 trillion budget bill, the Build Back Better Act, which includes, among other domestic priorities, funding for paid family leave and other child care benefits.
Walsh said he did not believe that the expanded federal unemployment benefits, which are set to expire Saturday, had any impact on keeping Americans out of the workforce.
The August report will certainly be on the mind of Federal Reserve Chair Jerome Powell and others as they debate later this year whether to wind down monetary support and increase interest rates.