DELTA DELIVERS A DAMAGING BLOW

A little more than a week ago, the Department of Labor's Bureau of Labor Statistics (BLS) released September's jobs report. The report's top line is that the economy added 235,000 gigs during the month of August, and that the overall unemployment rate dropped to 5.2%. That rate is lower than July's 5.4%, and way below the 8.4% that prevailed a year ago.

So, good news, right? Well, not and here's a few reasons why.

First, that 235,000 figure is only about a third of the 720,000 gigs that some economists had been predicting. The previous two jobs report indicated that the economy added 962K and 1.1 mill, respectively. So, that 235,000 is positive but puny--both in terms of what many economists had predicted and in terms of the number of jobs produced during the previous months. We'll see but the number of gigs that the economy has been grinding out might be headed downward.

Second, while the overall economy experienced an aggregate growth job growth of 235k, a number of relatively low paying industries and occupations experienced low, slow, or no job growth. Take, for instance, the leisure and hospitality industry. Since getting slammed by the earlier lockdowns, in recent months this industry picked up steam, and was clocking about 400,000 jobs per month for June and July. In August, though, job growth in that industry screeched to a halt. No net loss or gain in jobs. Zilch. Within that industry, the number of jobs in the food service and dining places plummeted by a whopping 42,000. While some categories within the industry experienced job growth, that growth was offset by job loses--hence, the zero net growth within the industry as a whole.

Third, don't get hypnotized by that drop in the unemployment rate from 5.4% to 5.2%. Don't get me wrong; that's a good thing. Nobody ought to be out here hoping and cheering for an increase in the unemployment rate. But remember that thing about the potential of aggregate numbers to be conceal as much as they reveal? Well, that's relevant here, too. Poke around and peel back the layers of data contained in the report, and you'll run up against this: Although the overall rate of unemployment declined, the rate for Black folk went up, not down. Between the months of July and August, the Black unemployment rate increased from 8.2% to 8,8%. And, just in case you're wondering, the White unemployment rate dropped from 4.8% to 4.5%. Of all the racial and ethnic groups included in the Jobs Report, Black folk stand out as being the only one whose unemployment rate increased between July and August.

DELTA'S DISRUPTIVE BLOW

So, what's up with the tepid jobs report-- a report that shows, among other things, a huge drop in job creation and an upward tick in the Black unemployment rate despite a decline in the overall rate?

Well, one of the things that definitely up is this: Delta is unleashing some damage. A particularly infectious variant of COVID, this new wave of infections and hospitalizations is slowing down business and putting a damper on job growth, with restaurants, bars, hotels, recreation, and retail taking the brunt of Delta's economic damage. These areas of the economy employ a disproportionately high number of low-paid and non-White workers and therefore when they stall out, these are very folk who get pulled into the quicksand. And when these stall-outs interact with racial discrimination, what you see is what you get: An increase in the Black unemployment rate.

The bottom line is that we're no ways out of the woods.