WASHINGTON (Reuters) – U.S. employment growth likely pulled back in August after gaining nearly 2 million jobs in the past two months as soaring COVID-19 cases reduced demand for travel and entertainment, but the pace was probably enough to sustain the economic expansion.

FILE PHOTO: A sign advertising job openings is seen while people walk into the store in New York City, New York, U.S., August 6, 2021. REUTERS/Eduardo Munoz

The Labor Department’s closely watched employment report on Friday would come as economists have been sharply marking down their gross domestic product estimates for the third quarter. Reasons cited include the resurgence in infections, driven by the Delta variant of the coronavirus, and relentless shortages of raw materials, which are depressing automobile sales and restocking.

Surging COVID-19 cases could also have kept some unemployed people home, frustrating efforts by employers to boost hiring.

“The Delta variant is like a sandstorm in an otherwise sunny economy,” said Sung Won Sohn, a finance and economics professor at Loyola Marymount University in Los Angeles. “If it weren’t for that, employment in August would have been even higher.”

According to a Reuters survey of economists nonfarm payrolls likely increased by 750,000 jobs last month. The economy created 1.881 million jobs in June and July. Should job growth in August meet expectations, that would leave the level of employment about 5 million jobs below its peak in February 2020.

But the forecast is highly uncertain, with estimates ranging from 375,000 to 1.027 million.

High frequency indicators have suggested a softening in demand for air travel, hotel accommodation and in-person dining, which some economists expect led to a moderation in leisure and hospitality job growth.

Reports this week showed a measure of factory employment contracting and private payrolls undershooting expectations. But hiring by small businesses accelerated and consumers’ views of the labor market remained fairly upbeat.

Over the last several years, including in 2020, the initial August payrolls print has undershot expectations and been slower than the three-month average job growth through July.

“COVID effects may make this comparison to the trend less useful, however, August payrolls have been revised higher with the subsequent two jobs reports in 11 of the last 12 years, including last year,” said Conrad DeQuadros, senior economic advisor at Brean Capital in New York.

Friday’s report will be crucial for financial markets as investors try to gauge the timing of the Federal Reserve’s announcement on when it will start scaling back its massive monthly bond buying program.

Fed Chair Jerome Powell last week affirmed the ongoing economic recovery, but offered no signal on when the U.S. central bank plans to cut its asset purchases beyond saying it could be “this year.”

Jim O’Sullivan, chief U.S. Macro Strategist at TD Securities in New York, who is forecasting a 400,000 rise in payrolls in August, does not believe this would be weak enough for the Fed to back away from their “this year” signal.

“But it would probably increase the probability of a

BRUSSELS (Reuters) -The European Union on Friday moved to reinstate COVID travel restrictions like quarantine and testing requirements for unvaccinated citizens of the United States and five other countries, two diplomats told Reuters.

EU countries started a procedure to remove the United States from a list of countries whose citizens can travel to the 27-nation bloc without additional COVID restrictions.

The non-binding list currently has 23 countries on it, including Japan, Qatar and Ukraine, but some of the 27 EU countries already have their own limits on U.S. travellers in place.

One diplomat said other countries that would be removed from the safe travel list were Kosovo, Israel, Montenegro, Lebanon and North Macedonia.

The decision on new EU travel restrictions for foreigners would become final on Monday should no EU country object, the sources, as well as two more EU officials, added.

The list is compiled on the basis of COVID-19 situation in each country, as well as reciprocity.

Despite EU calls, the United States does not allow European citizens to visit freely and the bloc has been divided between those pushing for equal treatment and those more reliant on tourism and reluctant to restrict U.S. travellers.

(Reporting by Robin Emmott, Gabriela Baczynska; Editing by Steve Orlofsky)

BRUSSELS (Reuters) -The European Union on Friday moved to reinstate COVID travel restrictions like quarantine and testing requirements for unvaccinated citizens of the United States and five other countries, two diplomats told Reuters.

EU countries started a procedure to remove the United States from a list of countries whose citizens can travel to the 27-nation bloc without additional COVID restrictions.

The non-binding list currently has 23 countries on it, including Japan, Qatar and Ukraine, but some of the 27 EU countries already have their own limits on U.S. travellers in place.

One diplomat said other countries that would be removed from the safe travel list were Kosovo, Israel, Montenegro, Lebanon and North Macedonia.

The decision on new EU travel restrictions for foreigners would become final on Monday should no EU country object, the sources, as well as two more EU officials, added.

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The list is compiled on the basis of COVID-19 situation in each country, as well as reciprocity.

Despite EU calls, the United States does not allow European citizens to visit freely and the bloc has been divided between those pushing for equal treatment and those more reliant on tourism and reluctant to restrict U.S. travellers.

(Reporting by Robin Emmott, Gabriela Baczynska; Editing by Steve Orlofsky)

Copyright 2021 Thomson Reuters.

People walk past a colonnade on Museum Island during warm temperatures, amid the coronavirus disease (COVID-19) pandemic, in Berlin, Germany May 30, 2021. REUTERS/Annegret Hilse

BERLIN, July 1 (Reuters) – Germany expects the Delta variant of COVID-19 to account for up to 80% of infections this month and could ease travel restrictions from countries like Portugal and Britain where it already dominates, its health minister said on Thursday.

Jens Spahn told a news conference that Germany could reduce the current 14-day quarantine requirement that it imposes on travellers from countries with high levels of the Delta variant once it is sure that vaccinated people are protected.

Spahn said the move could happen soon, without specifying.

Germany’s STIKO vaccination commission said later on Thursday that UK studies show that two vaccines doses seem to provide as much protection against the Delta variant as against other COVID-19 variants. read more

Spahn reiterated the importance of speeding up vaccinations, noting that 37% of Germany’s population has now received two shots, while 55% has had a first dose.

About half of German coronavirus cases are currently Delta variant and Spahn said it will dominate later this month.

Germany last week declared Portugal and Russia to be “virus-variant zones”, meaning only German residents can enter the country from those countries and still face a mandatory two-week quarantine even if they are fully vaccinated or test negative.

That had prompted German tourists there to rush home and airlines to cancel flights.

Germany also classifies Britain as such a “virus variant” zone. Chancellor Angela Merkel is due to discuss travel restrictions when she meets British Prime Minister Boris Johnson on Friday.

Spahn suggested these countries could be shifted to a designation as risk areas, meaning people can travel if they are fully vaccinated or have recovered from COVID-19, or be released from quarantine after five days if they test negative.

The European Commission said on Tuesday that Germany should not impose a travel ban on Portugal but limit itself to imposing testing and quarantine requirements to be in line with the European Union approach meant to ease summer travel.

Reporting by Emma Thomasson and Thomas Escritt; Editing by Maria Sheahan and Catherine Evans

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  • Ryanair teams up with Manchester Airports Group on legal action
  • Other airlines expected to join campaign
  • Peak summer travel season is just weeks away
  • Current UK policy discourages travel to all major destinations
  • UK government says cannot comment on legal proceedings

June 16 (Reuters) – Irish airline Ryanair (RYA.I) is launching a legal challenge against Britain over its “traffic light” system for international travel, hoping to force a relaxation of strict rules that threaten the summer holiday season.

The airline has teamed up with Manchester Airports Group (MAG) and the pair plan to file papers at England’s High Court on Thursday to seek clarity over the transparency of the system, a MAG spokesperson said in an emailed statement.

Other airlines are expected to join the legal action.

With just weeks before the peak July and August travel season when most profits are made, the aviation industry is worried about losing another summer to COVID-19 as the British government blocks most travel, meaning more job losses and financial strain.

The industry has repeatedly criticised the government’s traffic light system for international destinations, saying it is unpredictable and doesn’t make scientific sense. It says some low risk countries and islands should be open for travel.

A government spokesperson said it cannot comment on legal proceedings.

“We recognise this is a challenging period for the sector, as we seek to balance the timely reopening of international travel while safeguarding public health and protecting the vaccine roll-out,” the government said in a statement.

Britain allowed vacations again from May after months of lockdown but discourages travel to popular holiday destinations such as Spain, France, Greece and the United States, classifying them as “amber” under its traffic light system.

This means travellers must quarantine for 10 days on their return and take multiple COVID-19 tests. Only a handful of places are classified as green, and none in the European Union after Portugal was removed at short notice earlier in June.

The court papers will argue the British government should clearly explain how it makes decisions on categorising countries, given the “dramatic” impact these decisions have on the aviation industry.

“The current opaque way that decisions are being made is undermining consumer confidence to book summer holidays and makes it impossible for airports, airlines and other travel companies to plan for the recovery of international travel,” the companies said in a statement to Reuters.

The aviation industry had been counting on Britons to be at the forefront of the resumption in travel, given the country has one of the fastest vaccine rollouts in the world.

Reporting by Akriti Sharma in Bengaluru, Editing by Rosalba O’Brien

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Philippines President Rodrigo Duterte on Monday prolonged partial coronavirus curbs in the capital and nearby provinces until mid-June to contain infections that have been decreasing since hitting a peak in April.

Religious gathering remain capped at 30% of venue capacity while dining in restaurants can operate at 20% in the capital region, an urban sprawl of 16 cities that is home to at least 13 million people, and nearby provinces.

Non-essential travels will remain prohibited.

Daily COVID-19 cases in the Philippines averaged roughly 6,300 for May, down by a third from April, after the government reduced operating capacity of businesses and limited the movement of people.

Duterte also extended a ban on inbound travel from India, Pakistan, Sri Lanka, Bangladesh, Nepal, Oman, and the United Arab Emirates until June 15, to prevent transmission of the coronavirus variant first discovered in India that is circulating widely in that country and the region.

Travellers coming directly from those countries, or with a history of travel to any of them within the last 14 days, will be denied entry. The Philippines has reported 13 COVID-19 cases tied to the more infectious Indian variant known as B.1.617.2.

The Philippines has the second-highest number of COVID-19 cases and deaths in Southeast Asia, next to Indonesia.

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Employers added a disappointing 266,000 jobs in April even as the number of new COVID-19 cases stayed low, more states lifted constraints and vaccinations accelerated.

The gains fell well short of projections in a recovery that’s expected to gather force through the summer, with a million or more jobs added each month.

The unemployment rate rose from 6% to 6.1% as a large increase in the labor force — the number of Americans working or looking for jobs — more than offset solid employment gains, the Labor Department said Friday.

Economists had estimated that 995,000 jobs were added last month, according to a Bloomberg survey. Instead, gains for February and March were revised down by a total 78,000, with March’s blockbuster 916,000 additions downgraded to 770,000.

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Economists proposed a variety of possible reasons for the poor showing, including worker shortages, a shift away from industries that thrived while Americans stayed home during the pandemic, supply-chain snarls and problems with Labor’s seasonal adjustment of the raw numbers. 

Leisure and hospitality, which includes restaurants and bars — the industry hit hardest by payroll losses — continued to recover, adding 331,000 jobs. But other sectors had weak showings.

Where jobs got cut

Professional and business services lost 79,000 jobs as staffing agencies cut 111,000 positions. Transportation and warehousing, which boomed as Americans stayed home and ordered goods and services online during the crisis, cut 74,000 jobs. Retail lost 15,000 jobs; manufacturing shed 18,000; and construction employment was unchanged after a massive gain the prior month.

“There are elements that suggests some of this represents a structural shift… with losses concentrated in sectors associated with online activity and jobs that may have been temporary during the pandemic,” economist Leslie Preston of TD economics wrote in a note to clients.

The public sector added 48,000 jobs. More schools are reopening for in-person classes, bolstering employment in local public education education, which added 31,000 jobs.  That’s also allowing more parents to return to the workforce.

Job growth is still expected to boom in the coming months. Oxford Economics reckons a record 8 million or so jobs will be added this year.

“We have no doubt that labor demand is set to rise much further over the next few months as the reopening continues,” says Ian Shepherdson, chief economist of Pantheon Macroeconomics, 

New COVID cases held steady at a low level through April while increasing vaccinations led more states to lift capacity limits at restaurants and other businesses. About one-third of the U.S. population has been fully vaccinated, according to the Centers for Disease Control and Prevention. That has prompted eateries and other outlets to recall more furloughed workers or ramp up hiring.

Temporary, permanent layoffs rise

But after falling steadily throughout the health crisis, the number of Americans on