Washington – US employers added just 194,000 jobs in September, a second direct gain and proof that the pandemic has taken a toll on the economy, with many companies struggling to fill millions of open jobs.
Friday’s report from the Labor Department also shows the unemployment rate fell to 4.8% from 5.2% last month. The rate fell partly because more people found jobs, but also because about 180,000 fewer people looked for work in September, meaning they were not counted as unemployed.
September’s sluggish job gains fell to less than the modest 336,000 the economy added in August and were the lowest since December, when employers actually cut jobs.
The economy is showing some signs of emerging from the drag of the delta version of the coronavirus, with new COVID-19 infections confirmed, restaurant traffic rising slightly and consumers willing to spend. But new infections remained high as September began. And employers are still struggling to find workers because many of the people who lost jobs in the pandemic have yet to start looking again. This confuses many economists, as job opportunities are at a record high.
President Joe Biden addressed the report on Friday, calling it “progress.”
“Overall, job creation in the first eight months of my administration is nearly five million jobs, jobs have risen, wages have risen, unemployment is low. This is progress. And it is a tribute to the hard work and resilience of the American people.” Who are battling this pandemic, working to keep their business afloat.
FILE – A shift manager operates a forklift inside the production floor at a rubber recycling company on October 4, 2021 in Colton, Calif. (Mel Melkon/Los Angeles Times via Getty Images)
Still, supply chain bottlenecks have gotten worse, slowing factories, halting homemakers and emptying some store shelves. The shortfall has pushed inflation to its highest level in three decades.
Biden said the jobs report was taken on September 13 when COVID-19 cases were high and the pandemic had taken a hard hold on American life.
“Since then, we’ve seen daily cases drop by more than a third and continue to trend downward. We’re continuing to make progress,” Biden said.
Many economists expect more people to re-enter the workforce as COVID progresses and Americans begin to travel, eat out and watch movies, and hiring will strengthen.
“This report is a look in the rear-view mirror,” said Daniel Zhao, senior economist at the jobs website Glassdoor, “and hopefully means the worst is behind us, and the worst was a slowdown in recovery.”
Economists had expected strong job growth as schools reopen in September, freeing up parents, especially working mothers, to return to jobs. Many of the increased unemployment benefits programs ended on 6 September, potentially providing incentives for more people to seek work. And, before Delta intensified, many companies planned to return to work in offices that would revive the still-dormant downtown.
Instead, as a result of the Delta version, many office buildings remain vacant and the risk of illness rises again. A Census Bureau survey found that the number of people not working because they had COVID or were caring for someone with an illness doubled between July and early September. The COVID outbreak has led to the temporary closure of some schools, making it difficult for many mothers to find permanent jobs.
Friday’s report said the proportion of Americans who either have a job or are looking for one — known as labor force participation — fell from 61.7% in September to 61.6%, which Below the pre-pandemic level of 63.3%.
The decline in labor force participation occurred entirely among women, indicating that many working mothers are still caring for children at home. For men, labor participation was unchanged. Some after-school programs last month to provide full day care had not yet been implemented. And in many cases child care has become scarce and expensive.
Federal Reserve Board of Governors member Lyle Brainard noted in a recent speech that an average of 2,000 schools in 39 states closed for six days due to the COVID outbreak in late September.
Mr Car Wash’s chief executive John Lai, with about 350 locations, said he wants to hire 500 people over the next three months to add 6,000 to the company’s workforce. Car Wash, based in Tucson, Arizona, has raised its average hourly-worker wage to $14.50 an hour since the pandemic began and offers health and retirement benefits. Yet it is struggling to attract applicants.
“This is definitely the most challenging labor market I’ve experienced in my 20 years in business,” Lai said.
He said some of his female employees had to leave their jobs to take care of the children. And despite the end of federal supplemental unemployment aid, LA is seeing little growth in the number of job applicants.
“I think that’s the big secret of the economy,” he said. “Those who are sitting on the edge – why are they sitting on the edge?”
He suspects that one factor remains the fear of getting sick at work.
The increased unemployment aid that ended in early September included a $300-a-week federal supplement, as well as programs that included first-time gig workers and those unemployed for six months or more. The end of those programs aided the cutoff for about 7 million people.
Many business owners and Republican political leaders argued that the additional $300-a-week benefit was discouraging some people from seeking jobs because they could get more money from unemployment aid. So far, however, the termination of those programs has had little effect on the number of people seeking work.
Economists still think the nearly 3 million people who lost jobs and stopped looking for work because the pandemic restarted their searches as COVID wanes. It took years after the 2008-2009 recession, they note, for the proportion of people working or looking for work to return to pre-recession levels. But the uncertainty created by a global pandemic, Zhao suggested, has made it difficult to predict when that might happen this time.
“We are not yet at the new normal where we can really say what to expect in terms of the speed at which workers re-enter the labor force,” he said.
Lydia Boussour, an economist at Oxford Economics, said September’s meager job gains would still be enough for the Federal Reserve to move forward with its plan to pull the economy back on its extraordinary aid. The Fed is expected to announce in November that it will begin to slow its bond purchases, aimed at lowering long-term lending rates and encouraging more lending and spending.
Tammy Browning, president of KLYOCG, a staffing agency, said she sees little urgency among some potential job seekers. Some families have learned to live with less, she said, adopting one income as the mothers stay at home. Household savings, on average, are still above pre-pandemic levels, in part thanks to stimulus checks.
“I think it will take several months for people to come back in full force,” Browning said.
The unemployment gap between white and black Americans remains large, with the white unemployment rate at 4.2%, compared with 7.9% for African Americans. The Hispanic unemployment rate is 6.3%; For Asians, 4.2%.
Another factor behind the weakness in recruitment last month was a sharp drop in local government education jobs. Despite the reopening of schools, the number of such jobs fell by 144,000 last month. That decline shows that many local school systems do not hire as many people as they typically do. Many people have had trouble finding enough bus drivers, cafeteria staff and other support staff.
Most industries added jobs last month, albeit at a lower pace. For example, transportation and warehousing, fueled by an increase in online shopping, added 47,000 jobs. The producers added 26,000. Restaurants, hotels and amusement parks, however, gained just 74,000 locations as of August, but were far below the pace in the summer, when they were adding hundreds of thousands of workers a month.
Another reason workers are scarce is the rise in retirement among older, more affluent workers, whose home equity and stock portfolios have grown since the pandemic and who have managed to build up savings. Goldman Sachs estimates that there are about 1.5 million retirees who would not have had the economy recover before the pandemic. Economists expect many of these people to remain retired.