July 2021 job report: How has the unemployment rate changed?
The release of the July figures continues the positive trend of employment, but there is still a distance before recovering all the jobs lost to covid-19.
Despite the drastic loss of jobs in the immediate aftermath of the Spring of 2020, there is some sustained positive news with regard to jobs. The unemployment rate fell by 0.5%, and more than 900,000 people joined the active workforce. However, the country is still millions of jobs from replacing the full workforce from before the pandemic in February 2020.
What's the month-on-month change?
According to the Labor Department, these are the changes in job gains or losses and the overall unemployment rate since January 2020.
US unemployment rate and number of jobs created or lost
|Month||Unemployment rate||Nonfarm payrolls|
|January 2020||3.5%||+ 225,000|
|March 2020||4.4%||- 701,000|
|April 2020||14.8%||- 20,500,000|
|May 2020||13.3%||+ 2,500,000|
|June 2020||11.1%||+ 4,800,000|
|July 2020||10.2%||+ 1,763,000|
|August 2020||8.4%||+ 1,370,000|
|September 2020||7.8%||+ 661,000|
|October 2020||6.9%||+ 638,000|
|November 2020||6.7%||+ 245,000|
|December 2020||6.7%||- 140,000|
|January 2021||6.3%||+ 49,000|
|February 2021||6.2%||+ 379,000|
|March 2021||6%||+ 916,000|
|April 2021||6.1%||+ 266,000|
|May 2021||5.8%||+ 559,000|
|June 2021||5.9%||+ 850,000|
|July 2021||5.4%||+ 943,000|
(Months in italics indicate an overall loss of jobs)
Why does the nonfarm payroll job numbers fluctuate so much?
Basically, the jobs market reduces in opportunities as the country hits a peak in covid-19 cases. The initial huge drop in April was a result of the near-total shutdown of the US economy, while the second trough in December was a result of the Alpha variant from the UK pushing cases up again. The third dip, in April of this year, panicked the jobs market but now, with the take-up of vaccines from much of the adult population, it seems the US economy is on a good track before winter.
Despite just over 50% of the US population vaccinated, there has been a worrying rise in cases driven by the Delta variant of covid-19. The new variant is much more infectious than previous variants. It has forced some states to reimpose some restrictions and others to impose vaccine mandates on federal workers. As the country heads towards winter, where more of the population will be indoors, there will be a higher risk of infection and this could put the US's economic recovery under threat.
Why is the July job news so positive?
Some of the sectors which were damaged most by covid-19 have seen a healthy number of jobs recovered. The leisure and hospitality sector saw 380,000 new vacancies filled. Other sectors with positive job news is the education sector, which hired 261,000 new people.
There had been concern that the extra unemployment benefits would stop people from getting new jobs, but this theory has been quashed by the subsequent jobs reports of June and July.