WASHINGTON - High frequency data indicate U.S. hiring fell in July - not held steady as widely expected - with particular softness among states that ended federal unemployment benefits and areas where the COVID - 19 Delta variant is raging.
Payroll firm UKG said the growth in employees across a wide range of industries grew 1.1% from mid-June to mid July, which coincided with the period when the federal government employment survey is conducted. That was around half the growth rate of growth seen between May and June, ahead of a national job report on 850,000 additional jobs added in June.
Data on small business hiring from Homebase time management company fell from mid-June to mid-July.
Notably, a UKG analysis of data spanning the period when 26 states began to halt federal unemployment benefits showed that growth in work shifts in those states was half of what it was elsewhere - 2.2% from May until July versus 4.1%.
That adds to an accumulating body of evidence that the gamble a largely Republican group of governors made in halting the $300 weekly stipends didn't parlay into more jobs.
We just haven't seen the surge of people returning to businesses that businesses were hoping for, said UKG vice president Dave Gilbertson. He anticipates a smaller number of jobs added in July than in June.
Labor Department data will be updated in a national job report on Friday for evidence about the path of a U.S. economy that has already returned to pre-pandemic levels in terms of output but remains roughly 7 million jobs shy of where it was in early 2020.
In contrast to Gilbertston's view, the median estimate of Reuters economists is that hiring continued apace in July with companies forecast to have added 880,000 payroll jobs.
Gilbertson said that he still anticipated strong hiring in the Fall as schools again open and daily life continues to notch toward normal.
This may well depend however, on how the economy responds to the resurgence of coronavirus infections led by the highly contagious Delta variant. Evidence is emerging that the renewed outbreak is taking a toll, especially in some of those Republican-led states where hiring had proved stodgy despite the early cutoff of unemployment benefits.
A state-level recovery index from Oxford Economics, for example, points to a drop in economic activity and employment among high-infection states like Florida, Missouri and Arkansas.
Recoveries were either flat or weaker in the high breakout states, said Oxford lead U.S. economist Oren Klachkin, leading the firm's national recovery index to decline for the first time since April. Worsening health data across the country may show that the recovery is slipping.
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The Transportation Security Administration reported that 4.2 million travelers checked into flights last weekend, about 85% of the comparable weekend in 2019 and in line with recent weeks. OpenTable showed diners continuing to turn up at restaurants at levels comparable to 2019 - 2014.
During the pandemic economists have taken particular attention to mobility, the movement of people outside their homes as a general sign of recovery. As of now, Klachkin said, it hasn't slowed.
Why do both parties in the U.S. economy seem to be moving with respect to hiring?
With roughly one job available for every person estimated to be unemployed, economists have puzzled over why positions aren't filling faster and offered a list of reasons from the ongoing fear of infection to the lack of available child care.
Recent analysis has consistently minimized one of those explanations: the impact on the extra unemployment benefits
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Researchers at the JPMorgan Chase Institute and the University of Chicago found that using JPMorgan data on account holders who received jobs and lost enhanced unemployment benefits that through April the payments reduced the reemployment rate by no more than 1 percentage point. The payments, reduced with few conditions to a broadened group of individuals, were $600 per week late in the pandemic and offered in 2020 to $300 later. They were a key reason why employment was up during the pandemic despite massive unemployment.
Arindrajit Dube, an economist at the University of Massachusetts Amherst used data from the Census Household Pulse Survey to determine that the suspension of benefits in a group of states did not increase hiring but instead increased self-reported hardship in paying regular expenses.
UKG's Gilbertson said he attributed the slower rate of shift growth in one group of states to the fact that they generally were among those who imposed earlier restrictions early in the pandemic and didn't have as far to cover. It was also possible that the surge in cases is leading to some early signs of a slowdown.
Anyhow, he said the data seemed clear on one point: The extra benefits were likely not the thing holding people back from accepting a new job.