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Hiring Slows in the United States Amid COVID-19 Delta Variant Surge

New data from payroll firm UKG reveals that hiring in the United States slowed in July, and many states that are currently struggling with the increase of COVID-19 infections because of the Delta variant are experiencing this slow in hiring growth. States that also ended federal unemployment benefits have also experienced slowness in hiring. 

UKG data reveals that hiring growth grew by about 1.1% in various industries from mid-June to mid-July. Between May and June, hiring grew by about 2%. June also saw 850,000 payroll additions, which was positive for many economists who have been waiting to see more new job hires throughout the country. Now, however, this latest data seems to suggest that hiring still isn’t picking up like many initially thought.

Hirings have slowed down across many industries, as well as for large corporations and small businesses. This could be for many reasons. For one, the Delta variant of the COVID-19 virus has caused infection increases nationwide, though it has hit some states particularly hard. In these states hit hard, UKG has noticed a slow in hiring growth. Much like earlier this year, many Americans are not returning to the workforce when COVID-19 infections are high in their town or state. 

It’s also worth noting that the states that ended federal unemployment benefits early have now experienced a slowing of new job hirings. Initially, it was thought that by reducing unemployment benefits, more people would return to work. However, in the states where this was done, hiring has slowed, signaling that there may be more underlying causes as to why Americans aren’t re-entering the workforce as first thought.

Economists are still optimistic about what the rest of the year will hold, however, when it comes to the labor market. While hirings haven’t picked up like many forecasted, many analysts still believe that the fall and winter will bring in more job hirings. As students head back to school in the next month or two, it is expected that many will also return to the workforce, as they will no longer have to worry about things like childcare. 

While people have been returning to work, the nation hasn’t seen the surge in hirings that many expected as the economy reopened earlier this year. Businesses, because of the surge in consumer demand, expected many to return to work, though this hasn’t yet happened.

Currently, the United States is about 7 million jobs behind where it was in 2020 before the COVID-19 pandemic changed everything. The government will release a full hiring analysis for the month of July soon, which will help analysts get a good look into where the labor market and economy stand. Many analysts expect more jobs to have been added in July, though it does look like it will be a slower growth than anticipated. 

While the Delta variant could change things, many economists are optimistic about more hirings being added to payrolls later this fall as students return to school and life continues to get back to “normal”.

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