The August slowdown in U.S. job creation hit harder in states that pulled the plug early on enhanced federal unemployment benefits, places where an intense summertime surge of coronavirus cases may have held back the hoped-for job growth.
New state-level data released Friday by the Bureau of Labor Statistics showed the group of mostly Republican led states that dropped a $300 weekly unemployment benefit over the summer added jobs in August at less than half the pace of states that retained the benefits.
Elected leaders in those states argued the payments, in place since spring of 2020 to help families through the pandemic, were discouraging people from work and holding back an economic recovery that seemed to be gathering steam earlier this year when the impact of vaccines was taking hold and coronavirus cases were falling.
But some of those same states, notably Florida and Texas, are also hotbeds of opposition to government health mandates like mask wearing, and the surge of infections there in July and August appeared to dent hiring across the sorts of "close contact" businesses that have suffered most during the health crisis and had begun to recover quickly.
Overall employment in the leisure and hospitality fell about 0.5% in the 26 states that ended benefits, and rose 1% elsewhere.