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Pandemic unemployment benefits end: What’s coming next week.

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Daily Business Briefing

Sept. 3, 2021Updated 

Sept. 3, 2021, 10:15 p.m. ET

Sept. 3, 2021, 10:15 p.m. ET

A barber shop that accepts Bitcoin in San Salvador, El Salvador. The country will make the cryptocurrency legal tender starting on Tuesday.
Credit…Marvin Recinos/Agence France-Presse — Getty Images
  • End of pandemic benefits: The federal emergency unemployment benefits of $300 a week and other aid for unemployed workers will expire. The cutoff could have long-term consequences for both families and the economy, as data showed a hiring slowdown in August.

  • E.C.B. meeting: The European Central Bank is scheduled to meet and discuss the outlook of its asset purchase program. Officials will consider new forecasts for gross domestic product and inflation and may signal a path to raising rates.

  • Affirm earnings: Affirm, the buy now, pay later provider, is set to release its quarterly financial report after the bell. The company’s services have become an increasingly popular option among consumers, leading to a recent partnership with Amazon to allow customers to pay in installments.

  • Kroger earnings: The grocery chain is scheduled to report its financial performance. Kroger’s stock has risen more than 47 percent in 2021, but supply-chain and freight costs continue to weigh on suppliers.

After gathering steam in June and July, hiring slowed considerably in August, a sign that the spread of the Delta variant of the coronavirus was hindering the economic recovery. Businesses added 235,000 jobs last month, the Labor Department reported on Friday, far below the 725,000 jobs expected by economists polled by Bloomberg.

“There’s no question that the Delta variant is why today’s job report isn’t stronger,” President Biden said. “I know people were looking, and I was hoping, for a higher number.”

Here’s what you need to know about the latest jobs report:


Takeaways From the August Jobs Report

Takeaways From the August Jobs Report

Ben Casselman

Ben Casselman📊 Reporting on jobs and the economy

Ella Koeze

We saw disappointing job growth in August. Employers added just 235,000 jobs, far below economists’ expectations for a gain of 725,000.

Here’s what you need to know →

9m ago

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Pay has been climbing strongly in recent months as job openings have exceeded the number of people actively looking for work.
Credit…Octavio Jones/Reuters

Wages continued to grow briskly in August even as hiring decelerated, a surprising development that economists said was probably driven partly by continuing demand for workers in spite of coronavirus outbreaks caused by the Delta variant.

Average hourly earnings climbed by 0.6 percent from July to August, more than the 0.3 percent that economists in a Bloomberg survey had forecast. Over the past year, they were up 4.3 percent, exceeding the expected 3.9 percent.

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Solid earnings growth came in stark contrast to job gains, which slowed markedly. Employers added 235,000 workers to payrolls in August, far fewer than expected, as leisure and hospitality hiring stagnated.

Wage gains have been hard to read during the pandemic because they have been affected by what economists call “composition effects”: Virus layoffs and unusual rehiring patterns have shaken up who is working, and when higher-paid workers make up a bigger share of the pool, it can deceptively look as if average pay rates are climbing. Such quirks have been less pronounced in recent months, but changes in the labor force as the virus surged in August probably drove some of the apparent disconnect between compensation and hiring.

“A month with no net job gains in the low-paid leisure and hospitality sector will see a bigger increase in average hourly earnings than a month with more even payroll growth,” Ian Shepherdson, the chief economist at Pantheon Macroeconomics, wrote in an research note after the release.

Pay has been climbing strongly in recent months as job openings have exceeded the number of people actively looking for work. Michael Feroli, the chief U.S. economist at J.P. Morgan, suggested that strong unmet demand for workers may have contributed to especially strong wage gains at restaurants and hotels last month — but that it wasn’t a simple story.

“It is possible that firms are having a hard time finding workers in this low-wage sector,” Mr. Feroli wrote, noting that the 1.3 percent average hourly earnings increase for leisure and hospitality employees over the past month was rapid compared to that seen in other sectors. At the same time, “aggregate hours in the sector declined for the first time this year in August, suggesting that the spread of the Delta variant may be limiting demand for labor.”

It is unclear whether the wage pressures will last as workers return to the labor market. While it is hard to gauge how much enhanced unemployment benefits discouraged workers from taking jobs, and early evidence suggests that the effect was limited, a few companies have signaled that labor supply has been improving somewhat as benefits were cut off early in some states. Plus, other trends — the end of summer and the resumption of in-person school and day care — may allow parents and other would-be workers who have been on the sidelines to return to the jobs search.

“As those states rolled off the enhanced unemployment benefits, what we did see was an initial nice pickup in applicant flow and…

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