U.S. employers added 194,000 jobs in September, the Labor Department said Friday. That was a sharp drop from July when the economy added more than one million jobs, and a drop from August's 366,000 jobs. The number is a disappointment. Economists surveyed by FactSet expected the report to show that employers added nearly 500,000 jobs in September.
Behind the Numbers
The unemployment rate fell to 4.8 percent, better than the expectation for 5.1% and the lowest since February 2020. The number has consistently left out millions who the hidden candidate market, the long-term unemployed, and those who have delayed returning to the labor force due to health concerns during the pandemic.
The number was hurt by a 123,000 decline in government payrolls, while private payrolls increased by 317,000. The drop in the jobless rate came as labor force participation edged lower. A more encompassing number that includes discouraged workers and those holding part-time jobs for economic reasons fell to 8.5%, also a pandemic-era low.
Leisure and hospitality again led job creation, adding 74,000 positions. Professional and business services contributed 60,000 while retail increased by 56,000.
The data for the report was collected in mid-September during the peak of the Delta variant wave. There is some hope that revised date later this month will reflect a rebound in late September, after the data was collected. “This report is a glance in the rearview mirror,” said Daniel Zhao, an economist at the career site Glassdoor. “There should be some optimism that there should be a reacceleration in October.”
Nonetheless, the recent slowdown shows the economy’s continued vulnerability to the pandemic, and the challenges that will remain even once it is over. There are still millions fewer people on U.S. payrolls than in February 2020, and millions of people have been out of work for six months or more, the standard threshold for long-term unemployment. Yet the number of job openings is at a record high, and many employers report having a hard time filling positions.
Wages increased sharply. The monthly gain of 0.6% pushed the year-over-year increase to 4.6%.
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