U.S. Jobs Report Shows No Growth in Leisure and Hospitality Employment

The unemployment rate decreased slightly in August, but the service sector is still down by 1.7 million jobs.

Illustration by Feodora for Adobe Stock
Illustration by Feodora for Adobe Stock

The U.S. unemployment rate declined by 0.2 percentage points to 5.2 percent in August 2021, the U.S. Bureau of Labor Statistics reported today. While 235,000 jobs were added last month, none were in the leisure and hospitality sector. After increasing by an average of 350,000 a month over the prior six months, employment in leisure and hospitality is still down by 10 percent — or 1.7 million jobs — since February 2020.

While the unemployment rate fell and wages have risen, “the sectors where we expected to see the strongest hiring, like leisure and hospitality, really did not post the gains we expected,” Julia Coronado, president and founder of MacroPolicy Perspectives, noted this morning on MSNBC. “We can look through the details and see that, yes, probably the rise of the Delta variant, the delay of return to office, the cancellation of business travel and business events, is going to hit the leisure and hospitality sector.”

Among white workers, unemployment averaged 4.5 percent last month, while the jobless rate was 8.8 percent among Blacks and 6.4 percent for Hispanics. “[Blacks and Hispanics] tend to be disproportionately employed in the service sector in the leisure and hospitality sector, women in particular, so they've borne the brunt of the pandemic,” said Coronado. “As the pandemic surges again, they're the workers that are going to get hit the hardest.”

Marty Walsh US Secretary of Labor
Marty Walsh, U.S. Secretary of Labor

Federal benefits expiring

Expanded unemployment benefits provided by the federal government will expire on Sept. 5, but states can opt to use their American Rescue Plan dollars to extend the higher benefits, said Marty Walsh, U.S. Secretary of Labor. “Not every state in the country needs to expand unemployment,” he told MSNBC’s Stephanie Ruhle in a televised interview today. “It's really a state-by-state, area-by-area situation.”

Considering the gravity of the global pandemic, we should expect a slow recovery, he added. “About 4.5 million jobs have returned to our economy since President Biden was sworn in. We're moving in the right direction, but we have a ways to go. We're not going to recover in one month or two months or three months. This is going to be a longer-term recovery as far as getting people back into the workplace.”

Vaccination is critical

Controlling the spread of Covid is an essential factor in jobs recovery, Walsh emphasized: “We're asking people to get vaccinated, because... where you have high levels of vaccination, you're seeing lower levels of the Delta variant. There's a correlation there as well.”