US job creation falls and UK service sector slows as Delta variant hits growth – as it happened
Rolling coverage of the latest economic and financial news
- Biden: Delta variant hurt jobs growth
- Wall Street drops as jobs growth stumbles
- US jobs creation much weaker than forecast, just 235k
- Delta variant hits leisure and hospitality hiring
Earlier:
- UK service sector growth hits six-month low amid shortages
- Wages jump in battle for workers
- Worker shortage will lead to UK food price rises, industry warns
- China’s service sector shrank last month
The US economy added just 235,000 jobs in August, a sharp drop from preceding months, as employers cut back hiring plans amid the spread of the Delta variant of the coronavirus virus.
The unemployment rate declined by 0.2 percentage points to 5.2% from 5.4% in July and has fallen dramatically from a high of 14.7% in April last year. So far this year, monthly US job growth has averaged 586,000, according to the Bureau of Labor Statistics.
“While I know people 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.
“Wages are going up. This is the kind of growth that makes our economy stronger, and not just boom or bust.”
Related: US adds just 235,000 jobs in August as Delta variant spreads
European stock markets have closed lower, as the weak US jobs report weighs on traders.
The Europe-wide Stoxx 600 index has dropped almost 0.6%, its biggest fall in almost two weeks.
Job growth is moderating, but Wall Street still believes this is a strong labor market. The delta variant impact on hiring and the services sector will be transitory, which means a couple more months of noisy economic readings. The S&P 500 index didn’t know what to do with this lackluster NFP report. US stocks struggled to hold onto earlier gains on concerns the labor market recovery will struggle as economic growth dramatically slows down this quarter, inflation stays high, and a bumpy approval for the Democrats $3.5 trillion spending plan.
Stocks eventually drifted lower on concerns the impact of delta variant could weigh on the consumer, Chinese stocks continue to battle a plethora of regulatory hurdles, and inflationary fears are intensifying.
