Economy adds 194K jobs in September, way below expectations
The U.S. added just 194,000 jobs in September as the economy struggled under the surge of the COVID-19 delta variant, according to data released Friday by the Labor Department.
The unemployment rate fell sharply in September to 4.8 percent, a decline of 0.4 percentage points. But employment growth also fell sharply for the second consecutive month after a staggering rise in coronavirus cases began in late July.
Economists expected the U.S. to add roughly 500,000 jobs last month and see a much smaller decline in the unemployment rate. The U.S. added 366,000 jobs in August, according to revised numbers released Friday, after the country added more than 1 million jobs in July before the emergence of the delta variant.
“This is quite a deflating report,” wrote Nick Bunker, research director at Indeed.
“The hope was that August was an anomaly but the fact is, the delta variant was still with us in September. One optimistic interpretation is that COVID-19 case counts are receding, so future months should be stronger. But the reality is that we are still in a pandemic,” he continued.
Policymakers were hopeful that the labor market would kick back into gear after the delta surge shuttered schools and walloped consumer confidence. Though the surge appeared to wane toward the end of September, the jobs report showed an economy still severely limited by the pandemic through the first half of the month.
The leisure and hospitality industry led the private sector with a gain of 74,000 jobs, but restaurants and bars saw job growth stall for the second consecutive month. Industries including professional and business services (60,000), retail (56,000), and warehousing (47,000) saw solid employment gains in September but were buffeted by a sudden drop of 144,000 public teaching jobs.
While the unemployment rate fell sharply despite September’s meager jobs gain, labor force participation and other key gauges of labor market health stayed largely flat. The expiration of federal unemployment benefits on Sept. 6 also appears to have done little to jump-start the labor market.
Roughly 6 million Americans who want to be employed did not look for jobs in September, about flat from August, while those who looked for work earlier in the year but not September rose slightly. The number of Americans who were unable to look for work due to the pandemic also stayed even at 1.6 million.
“The decelerating jobs growth in September is likely to disappoint employers and policymakers that hoped the expiration of enhanced UI benefits would push Americans back into the labor force,” wrote Daniel Zhao, senior economist at Glassdoor.
“So far, evidence continues to suggest that the positive impact from withdrawal/expiration on jobs growth is relatively muted, though it may increase as the year continues and savings are depleted.”
Updated at 9:12 a.m.