Economists Admit Promising July Jobs Report, Fear Delta Variant Could Curb Strong Labor Market

The hospitality and leisure industries, some of the pandemic's hardest-hit, now boast the biggest job gains, accounting for more than a third of the total.

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The Bureau of Labor Statistics reported Friday the U.S. economy added 943,000 jobs in July and the unemployment rate fell to 5.4%.

It’s the biggest job gain since August last year, when more than 1 million positions were added back, and more than the 870,000 economists had expected.

“Unemployment claims are down, numbers are getting closer to pre-pandemic lows and consumer confidence is way up. So there's a lot of positive things about this jobs report,” said Bottomline Marketing founder and San Diego State University marketing professor Miro Copic.

Since May 2020, America has added back 16.7 million jobs. But it's still 5.7 million short of its pre-pandemic level.

The hospitality and leisure industries, some of the pandemic's hardest-hit, now boast the biggest job gains, accounting for more than a third of the total.

Burgeon at the Arbor Little Italy’s beverage coordinator Jake Nunes told NBC 7 the eatery hired three employees in the last month alone.

“The positions were filled pretty quick,” he said. “We got people to interview and started training a few days later…a lot of people are without a job currently, so they don’t need to put in their two-week notices anywhere.”

While the rampant growth is great news, the industry is still down almost two million jobs since February last year – a gap being felt especially hard by hotels as summer tourism peaks in San Diego.

“We’re constantly sold out,” said Michael Strickland, the front desk supervisor at Little Italy’s Porto Vista Hotel. “We are trying to get interviews, some people are just not showing up for interviews. We schedule them every day -- some people show up and some don’t.”

He told NBC 7 the 200+ room hotel usually runs with a staff of over 50 people, and right now four employees are keeping the business afloat.

“You name it -- anything you can think of in a hotel, we’re short and we need it all,” he said. “Some people have been working nonstop through this pandemic – six days a week and we just want to get a break. Hopefully people want to come back to work…and get back to normal life because this isn’t life.”

Copic said there are a few reasons the hospitality industry is still struggling despite the promising new report.

“What's happening in restaurants, bars and hotels, is that they're all looking at the same time and a lot of people are still waiting for schools to open because childcare is a major issue,” he said. “These are frontline jobs. They're very tiring. In the past people took them because that's all that was available….now, a lot of people are reconsidering their career.”

Copic said while the report is evidence the economy is rebounding, it doesn’t reflect the full impact of the Delta variant’s recent rapid spread and that will change in future reports.

“I think the job numbers nationwide will slow down…over the next two to three months. With the Delta variant, there's going to be some caution,” he said. “We’ve seen a lot of companies, not only are they requiring vaccinations, but they're also postponing their back to office dates.”

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