The pent-up demand in the economy after more than a year of shutdowns, slowdowns, layoffs, and business failures should be contributing to skyrocketing employment numbers as companies ramp up their operations to meet that demand.
And Democrats have spent trillions of dollars pouring massive amounts of cash into the economy hoping to jumpstart recovery from the pandemic-induced recession.
But a large part of the economy is based not on dollars and cents but on expectations. You can have all the demand you can handle, the government can continue to throw money at the American people like clowns tossing candy at the Shriners’ parade, but none of it matters if expectations don’t match what’s happening on the ground.
American businesses are not confident of the future. If they were, they would have created more than the dismal 235,000 jobs in August that the Bureau of Labor Statistics says they did.
Analysts are saying that the slowdown was the result of the perception that the delta variant of the coronavirus is affecting consumer confidence.
The rising number of Covid-19 cases tied to the Delta variant resulted in slower job growth for two reasons, economists say. Businesses, particularly in services sectors requiring in-person contact, held off on hiring amid heightened pandemic uncertainty. Jobless individuals who are fearful of Covid-19 health also were slower to return to the labor market
The Delta variant also appears to be denting consumer spending growth and confidence. The number of diners seated at restaurants was down 9% in the week ended Sept. 2 compared with the same week in 2019, before the pandemic, for instance, according to reservations site OpenTable. The volume of people eating out has gradually slowed from earlier this summer.
Despite promises from Joe Biden that there won’t be any more national lockdowns, many don’t trust the president’s word. In addition, businessmen may not be policy experts, but they know what the future holds for America under Joe Biden.
There may not be lockdowns, but there will be new laws, new rules, new regulations that will make it harder to do business and make money.
For now, it’s the fear that states will reimpose restrictions, especially on bars, restaurants, and the hospitality industry, that’s putting a damper on job growth.
In another sign of weakening, the number of employees logging hours fell 4% in August from July, according to Homebase, a scheduling-software company with mainly smaller-business clients. The steady decline in employment throughout the month was driven by industries that had seen the sharpest job growth in recent months amid state reopenings. The number of hospitality employees working dropped 35% from mid-July, while those employed in entertainment fell 20%, according to Homebase.
Will politicians begin to panic because of the increased number of positive COVID-19 tests? Certainly, the rapid filling of ICUs in hospitals is worrisome, but it’s part of the cycle of the pandemic and shouldn’t last more than a couple of weeks in most places.
It’s expected that once schools fully reopen, parents who had stayed home when schools were closed will once again return to work. But unless Joe Biden can turn the expectations game around, it will be a long, bleak winter for the U.S.
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