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Labor secretary: U.S. economy is at a 'fragile' point

·Chief Political Correspondent
·2 min read

After the July jobs report showed the biggest employment increase in almost a year, the Biden administration is urging Americans to get vaccinated to stave off health and economic threats posed by the Delta variant.

"[We] can't let this get out of control," U.S. Labor Secretary Marty Walsh said in an interview with Yahoo Finance Live. "We're at a certain fragile point in our economy right now. Things are moving in the right direction. People are traveling. Tourism is picking up. Manufacturing is happening. Job growth is happening — and to have it go backwards would be tough."

Non-farm payrolls rose by 943,000 in July and the unemployment rate fell to 5.4%. Despite the report that topped expectations, there are still fears the Delta variant could slow the economic recovery if workers remain on the sidelines because of health concerns or childcare issues. Some companies have already delayed their return to the office and local mask mandates have been reinstated in certain parts of the country.

Walsh told Yahoo Finance that he and President Biden support companies mandating COVID-19 vaccines for their employees.

Enhanced unemployment benefits expire in early September, though many states have already dropped the $300 weekly boost. Walsh said he doesn't believe those benefits have discouraged people from going back to work.

About 7.5 million Americans could lose unemployment benefits when the pandemic programs expire, according to the Century Foundation. Millions of self-employed workers and gig workers will no longer be eligible for the aid.

Secretary of Labor Marty Walsh speaks during a news conference at the White House in Washington, U.S. April 2, 2021. REUTERS/Erin Scott
Secretary of Labor Marty Walsh speaks during a news conference at the White House in Washington, U.S. April 2, 2021. REUTERS/Erin Scott

Biden has said he expects the enhanced benefits to expire and there hasn't been much talk of extending them further on Capitol Hill.

"The Delta variant could change a lot of things. I mean, we saw the president extend the eviction moratorium the other day. If we weren't seeing spikes in the Delta variant, he wouldn't have to do that," said Walsh when asked about the expiring programs.

"We're going to kind of watch this thing, monitor this thing pretty closely and see where we are day to day, week to week," he added.

While Walsh said he hopes to see more job gains in September, he says school re-openings will give the labor market more of a boost than the expiration of the benefits.

"The variant could cause a little havoc there," said Walsh. "These last three months have been really strong and solid. Last month was 938,000 jobs [revised up from 850,000]. This month is 945,000 jobs. Those are good months. Those are good reports. Hopefully to keep that momentum going, we have to just keep our eye on this variant and to make sure that we're not seeing spikes around the country."

Jessica Smith is chief political correspondent for Yahoo Finance, based in Washington, D.C. Follow her on Twitter at @JessicaASmith8.

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