While the rise in COVID-19 infections and the slowdown of the vaccine rollout has put a dent in Americans' optimism in recent weeks, the labor market continued its recovery at full speed in July. The latest jobs report showed the largest job gain since August 2020, as the U.S. economy added 943,000 jobs last month.
The leisure and hospitality sector once again led the job gains, adding 380,000 payrolls, with restaurants and drinking places accounting for the lion’s share of that total (+253,000). Notable gains also occured in local government education (+221,000), education and health care (+87,000) and professional and business services (+60,000), as those four sectors combined accounted for 80 percent of new jobs created in July.
Despite the latest upward trend, the leisure and hospitality sector remains the most heavily affected by the pandemic-induced jobs crisis. According to the BLS’ latest Employment Situation Summary, the number of jobs in leisure and hospitality still trails pre-pandemic levels by 1.74 million or about 10 percent.
As the following chart shows, the jobs recovery in general is taking longer than many people had originally hoped. After a quick initial rebound, job gains slowed to a crawl in late 2020 before picking up pace again in 2021. In July 2021, almost 17 months into the pandemic, total nonfarm employment was still 5.7 million jobs short of the 152.5 million jobs reported in February 2020.