The economy added 194,000 jobs in September, well below expectations. That figure also underperforms the August jobs increase, which was revised upwards to 366,000.
The unemployment rate fell from 5.2 percent to 4.8 percent. That’s a post-pandemic low, but still well above the pre-pandemic unemployment rate of 3.5 percent. And yet, this was only possible due to the many people exiting the job market. The labor-force participation rate was little changed at 61.6 percent, down from the pre-pandemic rate of 63.3 percent.
It is thought that the spread of Covid’s delta variant last summer caused many would-be job seekers to hold off looking for work. With the recent decline in new Covid-19 cases, many expect the October jobs number to improve markedly. Certainly, the jobs are there. At the end of July, there were nearly 11 million unfilled jobs, the highest on record. That far exceeds the number of unemployed, which stands now at 7.7 million. Layoffs declined as employers held on to the workers they had, and initial jobless claims fell by 38,000 to 326,000 last week, close to a post-pandemic low.
Wage growth was a bright spot. Average hourly pay in the private sector grew by 4.6 percent in September when compared to a year earlier. This, of course, is due to the extremely tight labor market, which has forced employers to raised wages to keep and find workers. Of course, the recent increase in inflation, now at the highest in 30 years, has eaten up much of those wage gains.
With the increase in the number of those vaccinated against Covid-19, the approach to herd immunity, and the decline in the number of cases recently, one can hope that the pandemic’s influence on the economy will continue to wane.