September jobs report shows just 194,000 gain as Delta persisted

The latest wave of coronavirus led to a second consecutive month of disappointing job growth in September, with Americans avoiding resta...

The latest wave of coronavirus led to a second consecutive month of disappointing job growth in September, with Americans avoiding restaurants and travel and reluctant to join the workforce.

US employers created 194,000 jobs in September, the Labor Department said on Friday. That was down from 366,000 in August and well below the more than one million jobs created in July, before the more contagious Delta variant caused an increase in coronavirus cases in a large part of the country. The leisure and hospitality sector, which had been the main engine of employment growth before Delta’s emergence, created less than 100,000 jobs for the second consecutive month.

The unemployment rate fell to 4.8%, but that was in part due to people leaving the job market entirely – a sign that public health fears and other Covid disruptions are still preventing them. people looking for work.

Data released Friday was collected in mid-September, when the Delta wave was near its peak. Since then, cases and hospitalizations have declined across much of the country, and more recent data from private sector sources suggests economic activity has started to rebound. If these trends continue, employment growth could approach its pre-delta pace later this fall.

“This report is a peek in the rearview mirror,” said Daniel Zhao, economist at career site Glassdoor. “There should be some optimism about a re-acceleration in October.”

Nonetheless, the recent downturn shows the economy’s continued vulnerability to the pandemic and the challenges that will remain even after it ends. There are five million fewer people on payrolls in the United States than in February 2020, and 2.7 million people have been out of work for six months or more, the standard threshold for long-term unemployment. Yet the number of vacancies is at an all-time high and many employers report having difficulty filling positions.

Earlier this year, many economists and policymakers hoped that September would be the month when this stalemate began to ease, with schools and offices reopening and extended unemployment benefits ending. This easing did not take place. The resurgence of the pandemic has delayed the reopening of offices and disrupted the start of the school year, and made some people reluctant to take jobs that require face-to-face interaction. At the same time, preliminary evidence suggests that the cut off unemployment benefits didn’t do much to push people back to work.

“To be honest, I’m a little confused,” said Aneta Markowska, chief financial economist at investment bank Jefferies. “We all waited until September for this big hiring wave on the assumption that unemployment benefits and the reopening of schools would bring people back into the workforce. And it doesn’t seem like we’re seeing that. “

Ms Markowska said more people may start looking for work as the Delta variant eases and burns savings accumulated earlier in the pandemic. But some people have taken early retirement or found other ways to make ends meet and may be slow to return to the workforce, if they do come back at all. This could have lasting economic effects, especially if the recent slowdown in hiring persists.

In the meantime, employers are raising wages and offering other incentives to attract candidates. Average earnings rose 19 cents an hour in September and rose more than $ 1 an hour over the past year, after a series of strong monthly increases.

That, combined with perks like the child tax credit which provided a financial cushion for low-income families, arguably placed workers in their strongest bargaining position in decades, said William M. Rodgers III, director of the Institute for Economic Equity at the Federal Reserve Bank of St. Louis.

“This period currently represents the first time in a long time that people have felt they have some security,” said Rodgers. “And that’s probably, for a lot of them, a weird feeling, because they haven’t had it for a long time.”

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Newsrust - US Top News: September jobs report shows just 194,000 gain as Delta persisted
September jobs report shows just 194,000 gain as Delta persisted
Newsrust - US Top News
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