U.S added 943,000 jobs in July as unemployment rate declined to 5.4%

Employers added jobs at their fastest pace in July and the unemployment rate decreased significantly, even after fears over the Covid-19′s delta variant persists.

The Labor Department said Friday that nonfarm payrolls in the United States increased by 943,000 seasonally adjusted jobs in July, up from 938,000 in June, which had been upwardly revised.

From a separate survey of households, the jobless rate decreased to 5.4 % in July, down from 5.9 % in June. Last month, the number of Americans working or looking for employment increased, as did the average hourly pay in the U.S.

The average hourly wage also rose more than predicted, by 0.4 % for the month, and is up 4 % from the same time last year.

The job-related surveys were performed in the middle of the month. That was before several local governments reinstated mask mandates and other restrictions, and before numerous companies declared that employees would be required to wear masks, get vaccinated, or be tested regularly.

The summer began with a high demand for labor. According to the Labor Department, 9.2 million jobs were available at the end of May, a record high.

Leisure and hospitality, for some months, led employment creation, creating 380,000 posts, 253,000 of which were in bars and restaurants. The industry was affected the worst by the pandemic but has shown continuous increases since the economy reopened.

The leisure and hospitality unemployment rate fell to 9 % in July from 10.9 % in June and 25 % a year earlier, however, there are still approximately 1.8 million fewer workers than before the pandemic. Wages in the industry increased by 1.2 % month over month and by 3.1 % from the previous year.

Education also saw significant growth, with 261,000 new positions. However, the BLS noted that the pandemic had skewed the sector's figures and likely raised the July figure.

Professional and commercial services gained 60,000, while 50,000 were from transportation and warehousing. Other services (39,000), health care (37,000), manufacturing (27,000), information (24,000), financial activities (22,000), and mining (7000) all saw gains. Retail lost 6,000 while construction and wholesale trade were flat, CNBC reported.

The figures come amid a surge in new coronavirus infections in the United States and throughout the world, with the most severe diseases occurring in places with higher unvaccinated populations. Fears have been expressed that the surge may hamper economic activity in the recovery, which began in April 2020 and has shown resilience despite periodic flare-ups of Covid cases.

At the same time, the United States is facing a never-ending labor shortage.

But, July's job increases contributed to an overall good employment environment. The May total was revised up by 31,000 to 614,000, while the June total was revised up by 88,000 to 938,000, for a total rise of 119,000.

With inputs from CNBC