5 takeaways from the September jobs report – NBC Chicago
September was not exactly the best hiring month many expected and hoped for.
With the Delta variant still disrupting the economy and employers struggling to find enough workers, the gain for the month amounted to 194,000 jobs – not even half of what economists had forecast. In August, the economy added a modest 366,000 jobs. Overall, hires over the past two months have fallen sharply from the 962,000 jobs created in June and the 1.1 million in July.
The labor market has undergone wild swings since COVID-19 hit the United States from March 2020, triggering a short but harsh recession that has shed 22 million jobs. Since then, employers have created 17 million jobs as huge injections of federal aid put money in people’s pockets and the vaccine rollout gave many the confidence to return to stores , restaurants and bars – at least before the delta variant breaks out.
Last month, private sector companies created 317,000 jobs, up from 332,000 in August and an average of 553,000 from January to July. The leisure and hospitality sector, which includes the hotels, restaurants and bars most devastated by the pandemic, has created 74,000 jobs. While this figure is up from 38,000 in August, it is well below the January-July average of 296,000 per month.
Friday’s job news wasn’t all bad. The Labor Department revised its hiring estimate for July and August upward by 169,000 combined. And the unemployment rate fell to 4.8% in September from 5.2% in August.
In normal times, 194,000 jobs would be considered a decent monthly gain. But as Robert Dye, chief economist at banking firm Comerica, noted: “These are not normal times. Another disappointing result in October would suggest that this is a fundamentally different job market than we thought a few months ago. ”
Here are five takeaways from the September jobs report:
DELTA TAKES A TOLL
From January to July of this year, employers added a staggering average of over 640,000 jobs per month. Then delta hit. COVID-19 cases have started to rise again and weaken the economic rebound. Job growth slowed in August and September. Since mid-September, however, confirmed cases of COVID have declined, possibly paving the way for the labor market to recover to regain momentum.
“This is a pretty deflating report,” said Nick Bunker, director of economic research at the Indeed Hiring Lab. “The hope was that August would be an anomaly, but the point is that the Delta variant was still with us in September. An optimist The interpretation is that the number of COVID-19 cases is declining, so the coming months should be stronger. But the reality is that we are still in a pandemic. ”
BEHIND THE DROP IN UNEMPLOYMENT
The unemployment rate fell to 4.8%, the lowest level since March 2020. But the reasons for the drop were a mix of good and bad.
The good news: The number of people who reported having a job jumped 526,000 last month. And those who reported being unemployed fell by 710,000.
The worst: One of the reasons the unemployment rate has fallen is that 183,000 people stopped looking for work last month and were no longer counted among the unemployed. The share of Americans who have or are looking for a job – the so-called labor force participation rate – slipped to 61.6% in September. Before the pandemic, the turnout had exceeded 63%.
Economists aren’t sure exactly why so many Americans have chosen to stay on the margins of the job market even as demand for workers grows. Some may have lingering fears of getting infected while working in public jobs.
Others are struggling with childcare arrangements at a time when school schedules are so uncertain. Some have chosen early retirement or are taking the time to rethink their careers after spending confined time with their families during the pandemic.
ASK FOR HELP
Hiring has slowed in part because companies simply cannot find as many workers as they need.
“Labor availability remains the biggest challenge for hiring right now,” Wells Fargo economists Sarah House and Michael Pugliese said in a research note.
In July, employers posted a record 10.9 million job vacancies and struggled to fill them.
Businesses were hoping that labor shortages would ease and the unemployed would look more eagerly for work after the federal government ended last month’s increased aid to the unemployed, including an additional $ 300 per week in addition to state benefits. But the end of federal aid doesn’t seem to have had much of an effect – until now.
Likewise, supply shortages, caused mainly by the unexpected speed with which the economy rebounded from last year’s coronavirus recession, kept businesses from operating at full capacity.
September’s overall hiring was reduced by the loss of 144,000 jobs at local public schools. The drop, however, reflected how the Labor Department adjusts the numbers to account for seasonal fluctuations.
The result: Schools were in fact hiring – although less than seasonal models suggested they would – possibly due to previous COVID-related closures or shortages of available teachers.
“As we feared, fewer teachers were hired than in typical years despite many schools returning to in-person learning,” said Lydia Boussour and Gregory Daco, economists at Oxford Economics, in a research note . “This corroborates anecdotal evidence that schools are struggling to find qualified teachers amid lingering fears of the virus and early retirements.”
IMPROVE OUTLOOK FOR ALL RACES
White, black and Hispanic workers have all benefited from the labor market over the past month.
For whites, the ranks of wage earners rose by 326,000. The number of unemployed fell by 436,000. And the unemployment rate fell from 4.5% to 4.2%.
For black Americans, the number of people with a job increased by 104,000. The unemployed fell by 187,000. And the unemployment rate fell from 8.8% to 7.9%. As a percentage, the employment of African Americans grew twice as fast in September as that of whites – 0.6% versus 0.3%.
For Hispanics, the improvement was more modest: the number of employees increased by 86,000. The number of unemployed decreased by 2,000. And the unemployment rate fell from 6.4% to 6.3% .