September was another disappointing month for job growth.
Cumulative change in jobs since before the pandemic
The latest coronavirus wave led to a second straight month of disappointing job growth in September, as Americans avoided restaurants and travel and were reluctant to rejoin the work force.
U.S. employers added 194,000 jobs in September, the Labor Department said Friday. That was down from 366,000 in August and far below the more than one million jobs added in July, before the more contagious Delta variant led to a spike in coronavirus cases across much of the country.
The unemployment rate fell to 4.8 percent. That figure doesn’t reflect millions of people who have left the labor force and so far have been reluctant or unable to return to work.
The data released on Friday was collected in mid-September, when the Delta wave was near its peak. Since then, cases and hospitalizations have fallen in much of the country, and more timely data from private-sector sources suggests that economic activity has begun to rebound. If those trends continue, job growth could approach its pre-Delta pace later this fall.
“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 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.
Earlier this year, many economists and policymakers hoped that September would be the month when that logjam began to abate, as schools and offices reopened and expanded unemployment benefits ended. That easing hasn’t happened. The resurgence of the pandemic delayed office reopenings and disrupted the start of the school year, and made some people reluctant to accept jobs requiring face-to-face interaction. At the same time, preliminary evidence suggests that the cutoff in unemployment benefits has done little to push people back to work.
“I am a little bit puzzled to be honest,” said Aneta Markowska, chief financial economist for the investment bank Jefferies. “We all waited for September for this big flurry of hiring on the premise that unemployment benefits and school reopening would bring people back to the labor force. And it just doesn’t seem like we’re seeing that.”
Ms. Markowska said more people might begin to look for work as the Delta variant eases and as they burn through savings accumulated earlier in the pandemic. But some people have retired early or have found other ways to make ends meet and may be slow to return to the labor force, if they come back at all. That could have long-lasting economic effects, particularly if the recent slowdown in hiring persists.
In the meantime, employers are raising wages and offering other inducements to lure applicants. That, combined with benefits such as the child tax credit that have provided a financial cushion to low-income families, has arguably put workers in their strongest bargaining position in decades, said William M. Rodgers III, director of Institute for Economic Equity at the Federal Reserve Bank of St. Louis.
“This period right now represents the first time in a long time where people feel they have some security,” Mr. Rodgers said. “And it’s probably, for many of them, an odd feeling, because they haven’t had it for a long time.”
Source: Economy - nytimes.com
