Meet a 24-year-old who quit 2 jobs during the pandemic as millions of American workers flex newfound power: ‘People are learning to respect that leap of faith’

New at work fired quit
  • Brandon Holland, a 24-year-old living in southern California, quit two jobs during the pandemic.
  • He joins millions of Americans ditching their jobs for better pay, conditions, and career prospects.
  • Holland is now seeking a long-term career. “People are learning to respect that leap of faith,” he said.

Brandon Holland was one of the record 4.3 million Americans who quit their jobs in August.

After more than two years working at a Starbucks near his home in Simi Valley, California, the 24-year-old quit over pandemic stress.

He said the cafe tried to extract the most work from the fewest employees.

“It was insane. We had people waiting 30 minutes in a drive-through line for a cup of coffee because we didn’t have another person to make coffee,” he said. “That was the story of the last year I was there.”

Holland’s story is just one example of a phenomenon sweeping through the US labor market. For the first time in decades, the labor market formula is flipped. There are plenty of jobs to go around, but businesses are struggling to hire and retain workers. The problem is due to a few mismatches: location, expectations, and skills.

August marked a fifth straight month of roughly 4 million workers quitting, handily outpacing levels seen before the pandemic. Quits tend to rise when Americans are confident in their ability to find better work. The environment for quitting is ripe, as the country still has more than 10 million job openings to fill. The mindset toward quitting has changed and has given way to a “Great Resignation.” Workers are ditching low pay and poor conditions, and forcing companies to rethink compensation.

As President Joe Biden put it in June, the American worker got a new “bargaining chip.”

‘I’m less hesitant to leave a job than ever’

After leaving Starbucks, Holland got a job in retail. Around one month later, he played his bargaining chip and quit that one, too.

“It’s absolutely easier … this is a new experience for me, where it seems that everywhere I go, there’s something new,” he said. “I’m less hesitant than ever to leave a job because I know that there are so many openings in my area and I know what I’m worth.”

Much of the country is having the same realization as Holland: Leaving a job can be the best thing for one’s career path. Holland, who said he’d quit four jobs in the years before the pandemic, was “lucky enough to learn the lesson pretty early,” but still needed some motivation to leave his Starbucks job.

That push came from a fellow coworker. She left her barista job after working at Starbucks for more than six years for a stable nine-to-five position that paid $4 more an hour. Her move was “a bit of a lightbulb” for Holland.

“I don’t want to work every Saturday or Sunday morning,” he said. “Why can’t I find something that’s going to pay the bills and be a Monday-through-Friday job and treat me well?”

The change in worker demand has also allowed Holland to switch from finding jobs to hunting down a long-term career. In the meantime, he’s working a temporary delivery job at a nearby mom-and-pop pizza restaurant, but his focus is on finding a sustainable gig. The 24-year-old has completed two interviews in hopes of landing a visual art job, an area about which he’s long been passionate.

Previous jobs were either short-term from the start or “left you wanting for something you feel is what you’re born to do,” Holland said. Customer service was “simply not worth the headache,” and the sector doesn’t have the long-term careers he’s now seeking out.

“You’re looking for something that’s more fulfilling and a longer venture. Something that’s going to keep you on your toes for a long time,” he said. “Even if it is a leap of faith to some extent, people are learning to respect that leap of faith.”

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US job openings slide for the first time in 6 months in August – and more people quit than ever

Hiring fair Florida coronavirus
A man hands his resume to an employer at the 25th annual Central Florida Employment Council Job Fair at the Central Florida Fairgrounds.

  • US job openings dropped to 10.4 million from 11.1 million in August, according to JOLTS data published Wednesday.
  • The reading missed the median estimate of 10.9 million openings and snapped a five-month streak of record highs.
  • The report also shows openings continuing to exceed workers and hiring slowing sharply.

Job openings fell for the first time in six months as the labor market’s recovery slumped in August.

Openings fell to 10.4 million from 11.1 million, according to Job Openings and Labor Turnover Survey, or JOLTS, data published Tuesday. Economists surveyed by Bloomberg expected openings to drop to 10.93 million. The reading marks the first decline since December 2020.

The report signals the labor shortage still going strong in August as the Delta wave intensified. Openings first shot higher through the spring as businesses struggled to attract workers. The labor shortage quickly led some firms to raise wages, while others waited for the virus threat to fade. And while job creation boomed through the summer, openings kept rising to fresh records.

August payroll growth shows Delta’s impact on job creation. The US economy added just 366,000 jobs that month, down from the 1.1-million-payroll gain seen in July and less than half the median forecast. The Delta variant was now officially hampering the hiring recovery, and September gains weren’t any better. Data out Friday showed the US creating just 194,000 payrolls last month, marking the smallest one-month gain of the pandemic era.

The August JOLTS data suggests labor demand held strong amid the hiring slowdown. The worker-to-opening ratio tells a similar story. There were roughly 0.8 available workers for every job opening in August, matching the July reading and ending a steady decline. Readings below mean there are more listings than workers to fill them, and the ratio first fell below 1 in June.

Typically, an abundance of openings comes late in economic expansions. Yet the extraordinary amount of unfilled postings pulled the ratio below zero far more quickly than in past recoveries.

Separately, quits rocketed to a record-high 4.3 million from 4 million in August. Quits have been elevated throughout the spring and summer as workers ditch their old jobs for new work. The extraordinary amount of quitting shows Americans’ confidence in their ability to find work. Still, the shakeup is sure to slow the return to pre-pandemic employment levels.

Where Americans can find jobs and where they’re leaving them

The JOLTS data lags the government’s payrolls reports by one month, meaning some takeaways are already stale by the time they’re published. Still, the Tuesday report reveals just where labor demand is booming and where it’s drying up.

Openings dropped the most in the health care and social assistance sector, with related businesses losing 224,000 postings. Hotels, restaurants, and bars shed 178,000 openings, and public schools cut 124,000 openings. Despite the declines, the three sectors still count for a great deal of the country’s job openings.

Openings increased by 22,000 across federal government roles, according to the report.

The sectors with the biggest declines in openings also saw quits soar. Quits rose at hotels, restaurants, and bars by 157,000, while they increased by 25,000 at public schools. The wholesale trade sector gained 26,000 quits in August as well.

With Delta case counts ripping higher throughout the month, the latest data reflects an exodus from in-person jobs. Just as the August jobs report showed hiring following the path of the virus, the JOLTS data suggest service businesses will struggle to fill openings until the coronavirus poses less of a threat.

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US jobless claims drop to pandemic low of 310,000 as federal unemployment benefits expire

Unemployment filing coronavirus
Ashley Testerman helps John Jolley resolve his unemployment claim at an unemployment event in Tulsa, Oklahoma on July 15, 2020.

  • Weekly jobless claims fell to 310,000 last week, setting a fresh pandemic-era low.
  • Economists expected claims to slide to 335,000. The print marked a second straight weekly decline.
  • Continuing claims fell to 2.78 million for the week that ended August 28, landing just above estimates.
  • See more stories on Insider’s business page.

Filings for unemployment insurance fell last week as the government’s boost to UI payments expired nationwide.

Initial jobless claims totaled 310,000 last week, the Labor Department announced Thursday. Economists surveyed by Bloomberg expected filings to decline to 335,000. The print marks a second straight decline and places claims at a new pandemic-era low.

The previous week’s count was revised to 345,000 from 340,000.

Continuing claims, which count Americans receiving unemployment benefits, declined to 2.78 million for the week that ended August 28. That landed above the forecast of 2.73 million claims and marked a sixth straight pandemic low.

The latest claims data covers the last week before enhanced unemployment benefits lapsed. The federal government had been supplementing states’ UI payments with a $300-per-week benefit since the American Rescue Plan was approved in March. That boost expired on September 6, leaving about 7.5 million jobless Americans with less support as virus cases soared higher.

The pullback in UI support comes as claims sit at historically elevated levels. Jobless claims are still well above their pre-pandemic trend of 200,000, and continuing claims need to drop by another million to return to their past average.

The cutoff didn’t affect every state at once. Twenty-six state governments had already pared back the supplement prematurely, with many arguing the move would push more Americans into the workforce. Yet research suggests the early pullback in UI support harmed local economies more than it helped. Analysis from The Wall Street Journal found “roughly similar job growth” in states that did and did not end benefits early. And Homebase researchers found that employment actually fell in states that slashed UI ahead of schedule.

The Biden administration has said that states can continue to provide boosted UI payments on their own with leftover funding from the American Rescue Plan. Yet no state has committed to taking such action, Insider’s Juliana Kaplan and Joseph Zeballos-Roig reported, and it’s unlikely Democrats can pass another salvo of enhanced UI.

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America’s new retirement age is 62 – or younger. ‘The Great Resignation’ is giving boomers their golden years back.

Residents dance in the square of The Villages retirement community in 2016.
Residents dance in the square of The Villages retirement community in 2016.

  • Nearly half of Americans expect to retire before turning 62, according to the New York Fed.
  • Retiring earlier lets Americans use their “golden decade” for better financial planning, potentially saving thousands of dollars in post-retirement income.
  • But the economy heavily depends on older workers, and a shift to early retirement could upend the labor market.
  • See more stories on Insider’s business page.

Americans plan to retire earlier than ever.

Just 50.1% of Americans expect to work beyond age 62, according to a July survey conducted by the Federal Reserve Bank of New York. That’s down from 51.4% in March and marks the smallest share since the Fed’s survey began in 2014.

Conversely, the reading means nearly half of US adults plan to retire before turning 62 years old. The share of Americans expecting to work beyond 67 also fell in July to a record low 32.4% from 32.9%.

This could be good news for workers, but presents challenges for the American economy.

3 reasons Americans are retiring early

More than one million older workers have exited the workforce since Covid struck the US in March 2020. Factors driving the mass exodus – deemed the “Great Resignation” by psychologist Anthony Klotz – vary.

For some, the risk of catching the coronavirus countered the desire to keep working. Roughly 1.5 million Americans cited Covid-19 as the main reason they stayed out of the labor force in August. That count held flat from July levels.

Others likely stayed unemployed due to a lack of attractive employment options. The biggest labor shortages are in the service industries that took the biggest hits during the pandemic. It’s possible older workers balked and decided to retire early, Julia Pollak, a labor economist at job site ZipRecruiter, told Insider’s Juliana Kaplan in July.

Soaring stocks also made more people rich enough to retire. The number of 401(k) and individual retirement accounts holding at least $1 million soared to a record 754,000 in the second quarter, Fidelity said in an August report, up 75% from the year-ago level.

For all workers, the average 401(k) balance rose 24% to $129,300 from the year-ago period, Fidelity said. The average IRA balance climbed 21% to $134,900.

The latest Fed data suggests early exits are the new normal, not a pandemic-era oddity.

Unlocking the ‘golden decade’

The wave of pandemic retirements stands to overhaul the US economy.

For one, it freed up younger baby boomers to better enjoy their 60s (the oldest boomers turned 75 in 2021). The decade already covers the most common retirement ages, but it also serves as the “golden decade” for tax planning, according to tax experts at Aspire Planning Associates, because it’s old enough to retire and young enough to plan ahead to reduce tax costs.

Early retirements could also relieve some pressure on the labor market and force employers to shift their focus toward younger workers, as employers have grown increasingly reliant on older workers over the past two decades. While employment has been almost flat for workers younger than 55 since 2000, it’s grown by nearly 20 million employees for Americans 55 and older, according to the Bureau of Labor Statistics. Simply put, the US economy was increasingly reliant on workers less than a decade from the average retirement age.

The graying of the workforce is another piece in the puzzle of an America revealed by the 2020 census to be having fewer babies, with fewer workers around to power the economy. With Americans less likely to work into their 60s and instead take advantage of the golden decade, employers will have to look elsewhere for workers.

The search is already taking place. Job openings rose to 10.9 million in July, marking a fifth consecutive record high. That came despite the US adding 1.1 million payrolls that month, suggesting businesses are still struggling to rebuild their workforces. Employers will just have to find ways to get younger workers to do the jobs of older ones -or robots will have to pick up the slack.

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US job openings hit another record high as the labor shortage charged into July

Now hiring sign
Photo of a help wanted sign along Middle Country Road in Selden on July 20, 2021.

  • US job openings rose to 10.9 million from 10.2 million in July, according to JOLTS data out Wednesday.
  • The print exceeded the estimate for 10 million openings and marked a fifth straight record high.
  • Job openings continued to exceed available workers despite the creation of 1.1 million payrolls in July.
  • See more stories on Insider’s business page.

Job openings in the US rose to a record high for the fifth consecutive month in July as demand for workers still outpaced hiring.

Openings climbed to 10.9 million in July from 10.2 million, according to Job Openings and Labor Turnover Survey, or JOLTS, data published Wednesday. Economists surveyed by Bloomberg expected openings to dip to 10 million.

The print shows openings climbing for a seventh straight month. Openings shot higher through the spring as businesses faced unusual difficulty in hiring. The phenomenon – quickly deemed a nationwide labor shortage – was fueled by factors including enhanced unemployment benefits, school closures, and virus fears. As businesses prepared for reopening and a wave of spending, jobless Americans were in no rush to get back to work.

Openings rose at a slower pace through the summer as job growth boomed. The US added 962,000 jobs in June and another 1.1 million payrolls in July as vaccination and the reversal of lockdown measures supercharged the labor market’s recovery. The hiring frenzy slowed sharply in August, but the latest JOLTS data shows labor demand was still strong the month prior amid stellar job creation.

The available-worker-to-opening ratio fell to 0.8 in July, signaling there were more job listings than workers to fill them. The measure fell below 1 in June for the first time since the pandemic recession began. It’s unusual for the ratio to sit so low just one year after a historically dire economic slump.

A higher number of job openings than unemployed workers tends to come after years of economic expansion, but the huge number of unfilled job openings has quickly pulled the ratio to such low levels.

Struggling services and massive quits

Although the JOLTS report lags the government’s monthly jobs data by one month, it provides more context to how businesses fared and where job demand was strongest.

Openings rose the most in the health care and social assistance sector, with a gain of 294,000 listings. The finance and insurance sector added 116,000 openings, and the accommodation and food services sector followed with a 115,000-openings gain.

The data shows service-industry firms rushing to rehire as the economy fully reopened. In-person services were among the hardest-hit businesses early in the pandemic as economic restrictions froze business and powered mass layoffs. As case counts fell and lockdowns reversed through the summer, those businesses counted for the bulk of job gains as they struggled to recoup their workforces.

Quits rebounded in July to roughly 4 million, falling just short of the record high seen in April. July marked the fourth consecutive month nearly 4 million workers have quit, signaling unprecedented confidence in the labor market. Workers tend to hold on to their jobs when they think finding a new opening would be difficult.

With job openings consistently rising to record highs, the elevated quits data suggests workers are taking the opportunity to find more rewarding jobs or move into different sectors entirely.

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August’s grim slowdown in hiring just knocked America’s full economic recovery back 2 months – to April 2022

Now Hiring man with mask
A man wearing a mask walks past a “now hiring” sign on Melrose Avenue amid the coronavirus pandemic on April 22, 2021 in Los Angeles, California.

  • The August jobs report was so bad it added two months to the projected economic recovery.
  • The US won’t return to pre-crisis employment levels until April 2022, Insider calculated.
  • Soaring Delta cases and possible weak hiring in key sectors this fall could delay the recovery even further.
  • See more stories on Insider’s business page.

US employers slammed the brakes on hiring last month. That has massive ramifications for the broader economic recovery.

The US added just 235,000 payrolls in August, according to data published Friday. That’s less than a third of the 733,000 jobs expected and the weakest month of job growth since January.

It also marks a massive slowdown from the promising growth seen just one month prior. July job creation was revised higher to 1.1 million, and June’s was also lifted to 962,000 new jobs. The deceleration in monthly job growth was so sharp, it added two months to the projections of when the US will reach pre-pandemic employment, according to Insider calculations.

Using the three-month moving average for US payroll growth, the jobs recovery is now expected to arrive in April 2022. By comparison, July’s stellar report shortened the projected recovery by four months, to land on February 2022.

The August report alone paints an even bleaker picture of the future.

If last month’s pace of hiring continues into the fall, it will take nearly two more years to return to the employment levels seen in February 2020.

And the full-recovery forecast only places payrolls at the highs seen before the pandemic. Job growth was trending at roughly 200,000 new payrolls per month before the crisis. The labor market is down roughly 5.3 million jobs from pre-pandemic levels, but returning to the early 2020 trend will require adding some 8.7 million jobs, Insider calculated.

Signs point to job creation floundering in the coming months.

The August report’s survey period ended halfway through last month, and virus cases have only risen in the weeks since. With the health situation worsening, subpar September data is likely in the cards, Ian Shepherdson, chief economist at Pantheon Macroeconomics, said.

“This is just the start of the Delta hit,” he added. “September likely will be weak too, and we’re becoming nervous about the prospects for a decent revival in October, given that behavior lags cases, and cases are yet to peak.”

An even harsher Delta wave stands to further slam the sectors that were previously leading the jobs recovery. Hiring was flat in the leisure and hospitality sector in August after average monthly gains of 350,000 payrolls the previous six months. Restaurants and bars shed 42,000 payrolls, and retailers lost 29,000 jobs.

Those sectors were the hardest hit by the pandemic’s onset last year, and the August report suggests the Delta wave is powering yet another slump.

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US futures climb after stocks hit record highs, while the dollar flatlines ahead of key employment data

Unemployment line
Economists expect nonfarm payrolls growth to have slowed in August.

  • US stock futures climbed Friday ahead of key nonfarm payrolls data for August.
  • The jobs report is expected to show an increase of 725,000, a slowdown on July’s 943,000 reading.
  • A lower-than-expected number will encourage the Federal Reserve to maintain its support for the economy, analysts said.
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US stock futures climbed on Friday while the dollar consolidated after a marked decline as investors awaited key employment data that could influence the Federal Reserve’s monetary policy.

S&P 500 futures were up 0.19% after the index on Thursday rose 0.28% to hit another record high – its 53rd this year. Nasdaq 100 futures were 0.16% higher, and Dow Jones futures were up 0.14%.

Meanwhile, the dollar stayed roughly flat ahead of the key data release, with the dollar index hovering at around 92.2.

The index has fallen from 93 on Friday last week, when Fed Chair Jerome Powell declined to commit to a timeline for the central bank to withdraw its support for the US economy. Investors have also sold the greenback ahead of Friday’s nonfarm payrolls data, which is expected to show a slowdown in hiring in August.

Elsewhere, Europe’s Stoxx 600 slipped 0.05%, and China’s CSI 300 fell 0.54% overnight. Tokyo’s Topix index jumped 1.61% to a 30-year high after Japanese Prime Minister Yoshihide Suga said he would resign, triggering hopes that his replacement may increase stimulus spending. The Nikkei 225 closed 2.05% higher.

US monthly jobs data will be published at 8.30 a.m. ET and is expected to show that nonfarm payrolls rose by 725,000 in August, according to economists polled by Bloomberg, down from the 925,000 increase in July. Yet the range of economists’ predictions is wide, ranging from 1 million to 400,000.

The data will be very closely watched by investors as it could influence the Fed’s view on when it should start “tapering” its bond purchases, which are currently running at $120 billion a month.

Read more: A 48-year market vet warns that the Fed will be forced to tighten policy ‘way sooner’ than investors anticipate as inflation continues to soar – triggering a stock market crash of up to 80%

“My thruppence worth … a number lower than 600,000 jobs will push back tapering expectations from the Fed,” said Jeffrey Halley, senior market analyst at trading platform Oanda, in a note. “That will see markets ‘buy everything’ and sell the US dollar.”

Yet Ian Shepherdson, chief economist at Pantheon Macroeconomics, said Friday’s figures will likely have little impact on the Fed as they were gathered before schools returned. That should affect key data points, such as the labor participation rate, he said.

“We’re now expecting the tapering announcement to come in December,” he said. “By then, the Fed will have both the October and November reports, which should give the all-clear to start reducing the pace of incremental stimulus.”

The bond market was quiet on Friday, with the yield on the key 10-year US Treasury note wavering at around 1.297%. Yields move inversely to prices.

In the oil markets, Brent crude was down 0.12% to $72.96 a barrel, while WTI crude was down 0.43% to $69.69 a barrel.

Bitcoin, the biggest cryptocurrency, slipped back slightly after breaking through the $50,000 barrier on Thursday as digital assets rallied. It stood at around $49,460 on Friday.

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US jobless claims slide to fresh pandemic-era low of 340,000

job fair marshalls
  • Filings for unemployment benefits slid to 340,000 last week, setting yet another pandemic-era low.
  • Economists surveyed by Bloomberg expected claims to total 345,000.
  • Continuing claims fell to 2.75 million for the week that ended August 21, coming in slightly below estimates.
  • See more stories on Insider’s business page.

The number of Americans filing for unemployment insurance fell last week, reversing the previous period’s climb and reaching a new pandemic low.

Weekly jobless claims totaled an unadjusted 340,000 last week, the Labor Department said Thursday. The median estimate from economists surveyed by Bloomberg saw claims sliding to a pandemic low of 345,000. The reading places claims at the lowest level since March 2020 and marks the second decline in three weeks.

The previous week’s total was revised to 354,000 from 353,000.

Continuing claims, which track Americans receiving unemployment benefits, slid to 2.75 million for the week that ended August 21, according to the report. That came in below the median forecast of 2.81 million claims. It also marked the fifth straight pandemic low for continuing claims.

The latest claims data covers the second-to-last week before the federal boost to unemployment benefits lapses. The government’s $300-per-week supplement will end on September 6 for the 24 states that haven’t cut the benefit early. While states prematurely ending the boost have argued the move would push more Americans into the workforce, several studies have since suggested the early cutoffs hurt local economies and did little to accelerate hiring.

The cancelation will also come while claims remain historically elevated. Weekly counts are still well above the pre-pandemic average of 200,000, and continuing claims need to fall by another million before meeting the pre-crisis norm.

In other labor-market news, hiring in the country’s private sector badly missed expectations in August. Private payrolls rose by 374,000 last month, ADP said in its monthly employment report. While the print marks a small uptick from July payroll growth, it fell well short of the 613,000-payroll forecast.

Hiring was likely dented by the surge in Delta cases and reinstatement of some mask-wearing rules. Daily case counts ended August at the highest point since January, when the virus’s winter resurgence was in full swing. The rebound in cases also cut into Americans’ hopes for the recovery, which likely slowed the recovery further.

“The Delta variant of COVID-19 appears to have dented the job market recovery,” Mark Zandi, chief economist of Moody’s Analytics, said in the ADP report. “Job growth remains inextricably tied to the path of the pandemic.”

Still, forecasts for the government’s nonfarm payrolls report remain promising. Economists expect the Friday jobs data to show 750,000 jobs added, and for the unemployment rate to slide to 5.2% from 5.4%. July’s jobs report trounced forecasts after ADP’s missed expectations, leaving a positive surprise in the cards for Friday morning.

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US private payrolls rise by 374,000 in August – badly missing estimates as virus cases surge higher

Now Hiring sign Boston
A help wanted sign is posted outside of Dunkin Donuts in Downtown Crossing in Boston on June 14, 2021.

  • US private-sector firms added 374,000 jobs through August, ADP said in its monthly employment report.
  • The reading fell short of the 613,000-payroll estimate but marked a decent pickup from July’s gain.
  • August saw new COVID cases reach their highest since January and the reinstatement of some mask rules.
  • See more stories on Insider’s business page.

Hiring by private-sector US businesses fell well short of expectations in August amid rebounding COVID cases and the return of some mask-wearing orders.

Private payrolls rose by 374,000 last month, ADP said in its monthly employment report. That missed the 613,000-payrolls estimate from economists surveyed by Bloomberg. While it did show a pickup from July’s 326,000-payroll gain, it’s still the second-smallest increase since February.

The August report shows the labor market struggling to recover as COVID cases surged higher. Daily case counts reached their highest since January last month as the Delta wave intensified across the country. The increase also led state and local governments to reimpose some mask-wearing rules, marking an abrupt ending to the reopening experienced through spring and early summer.

“The Delta variant of COVID-19 appears to have dented the job market recovery,” Mark Zandi, chief economist of Moody’s Analytics, said. “Job growth remains inextricably tied to the path of the pandemic.”

The print also suggests some states’ early cuts to federal unemployment benefits did little to push Americans into the workforce. Twenty-six states prematurely ended the federal government’s boost to unemployment insurance in a bid to accelerate hiring. While the move was meant to counter the labor shortage, recent studies suggest it did more harm than good, hurting spending and only slightly improving hiring, Insider’s Juliana Kaplan reported.

Other measures of the labor market’s rebound show a healthier rate of improvement. Weekly filings for unemployment benefits steadily fell through August and sit just above their pandemic-era low. Continuing claims, which track Americans receiving jobless benefits, fell to 2.86 million for the week that ended August 14. That’s the lowest since March 2020, when claims first spiked higher.

And economists expect the government’s payrolls data to show stronger August hiring than ADP’s. The Friday report is forecasted to show a 700,000-payroll gain, and the unemployment rate is expected to slide to 5.2% from 5.4%.

Hiring in the age of Delta

Once again, the leisure and hospitality sector counted for the bulk of the month’s job gains, with businesses adding 201,000 payrolls through August. Education and health services firms followed with a 59,000-payroll increase. The strong gains continue a trend of the hardest-hit sectors seeing the fastest hiring through the recovery.

Medium-sized businesses – those with 50 to 499 employees – counted for 149,000 of the month’s added payrolls. Businesses with more than 500 employees added 138,000 jobs, and those with fewer than 50 workers added 86,000 payrolls.

Three trends are set to guide the labor market’s rebound through the second half of 2021, Nela Richardson, chief economist at ADP, said. The Delta wave presents the greatest near-term risk to the recovery. Service businesses are doing “most of the heavy lifting” in hiring, but the new variant creates uncertainty that will likely weigh on job creation, she said.

The rebound in virus cases is also sending consumer confidence into a downward spiral. The University of Michigan’s consumer sentiment index tumbled to 70.2 from 81.2 in early August, its lowest level since 2011 and the biggest one-month drop since early in the pandemic. That decline will most dramatically hit job growth at businesses that require close physical proximity like airlines and restaurants, Richardson said.

The third trend is more encouraging. Labor demand remains strong, with job openings still at record highs and wages rising at a healthy pace. Demand for workers should serve as a “positive counterbalance” to the Delta wave and waning confidence, Richardson said. But the months-long labor shortage suggests worker supply won’t swiftly meet demand.

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3 reasons it’s ‘too soon’ to cut off expanded unemployment, according to Brookings

Unemployment protest
Unemployed people at a rally last year in Philadelphia, Pennsylvania.

  • It’s “too soon” for the US to cut boosted unemployment benefits, the Brookings Institute said Wednesday.
  • The aid is set to lapse for 7.5 million Americans early next month, and Congress is unlikely to extend it.
  • The think tank says letting it expire would widen inequality and slow the recovery without fixing the safety net.
  • See more stories on Insider’s business page.

Letting federal unemployment benefits expire in September will do far more harm to the US than good, the Brookings Institute said Wednesday.

Critical support for some 7.5 million unemployed Americans currently hangs in the balance, according to estimates from the left-leaning Century Foundation. A handful of federal programs that boost unemployment insurance are set to expire on September 6, cutting off aid that’s been in place since the CARES Act was approved in March 2020.

President Joe Biden has already punted the issue to Congress, and lawmakers are unlikely to renew the programs over the next two weeks. Rep. Alexandria Ocasio-Cortez told Insider’s Joseph Zeballos-Roig this week that progressives are “looking into” an extension, but she said it won’t happen before Labor Day and the Senate and White House seem reluctant to extend.

Letting it lapse is a mistake, and its consequences will ripple throughout the economy, Annelies Goger, a fellow at Brookings’ Metropolitan Policy Program, wrote. It’s “too soon” for the federal programs to lapse, and arguments in support of a September expiration are short-sighted, she added.

She laid out three reasons why, in her words, it’s just too soon to end it.

1. It just isn’t the reason for the labor shortage

Geiger dismissed the criticism that the UI boost exacerbated the nationwide labor shortage.

There is simply “little evidence that higher pandemic UI benefits have been a major source of employers’ problems in finding workers, or that those difficulties are widespread,” she wrote. Likewise, she said little evidence supports the argument that cutting it early increased employment.

Conservative lawmakers have railed against the aid for months, saying it disincentivized Americans from taking jobs and fueled lackluster hiring in the spring. The argument also led 26 states – all but one led by Republican governors – to prematurely cut the federal supplement.

The move was marketed as a way to push Americans into the workforce, but recent data suggests it had negative effects. Researchers found the cutoff led to a 20% drop in individuals’ spending, and total spending dropped by $2 billion in states ending the benefit early. At the same time, just 4.4% more workers in early-out states had jobs compared to peers in states keeping the boost intact.

2. The safety net isn’t fixed yet

Letting the benefit expire in September would also leave several problems with the UI program unfixed, according to Goger. Each state runs its own UI system, leaving the safety net “riddled with inequities, cumbersome processes, and outdated technologies.”

For one, several kinds of workers were left out from traditional UI. Domestic and agricultural workers weren’t able to benefit, and gig workers have only been included as a pandemic-era exception. The programs also exclude people who just started paid employment, reduced their work hours, or faced disruptions that cut into their ability to work, Goger said.

Differences between states’ programs also harm workers, hurting racial minorities and the long-term unemployed the most. The country’s poorest are frequently trapped in joblessness without adequate support, Goger said.

Reverting to pre-pandemic UI systems next month would doom the programs to suffer the same problems they’ve had for decades, Goger said, while replacing the state programs with a single federal system could allow for more equitable and efficient unemployment insurance.

(3) It will make inequality worse and hurt the economy

Doing nothing on UI would also worsen inequities throughout the economy, she added.

The benefit helped some of the hardest-hit Americans stay afloat, but most are still far from fully recovered. The labor shortage suggests swaths of workers are changing careers, and removing the UI safety net amid that shakeup could throw millions into economic disarray. Keeping the program intact would ensure those transitions can safely take place, especially when the Delta wave is slowing the pace of recovery, Goger said.

She wrote that the “broader ecosystems of safety net programs, services, data, and prevention strategies are critical infrastructure for a well-functioning, more inclusive economy,” and that ought to be the point of unemployment insurance. The job is unfinished.

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