September jobs report misses with gain of just 194,000: Here's what happened
September job growth misses expectations by more than half
America’s employers added just 194,000 jobs in September, the second straight month of disappointing payroll growth as the spread of COVID-19 continued to dampen the labor market's recovery from the pandemic.
The September jobs figure the government reported on Friday fell far short of the 500,000 gain forecast by Refinitiv economists, in part because Americans avoided traveling and eating at restaurants as the highly contagious delta variant drove a late-summer surge. Many workers were also reluctant to rejoin the workforce.
It marked the slowest job creation this year after gains of 366,000 in August and 1.09 million in July.
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"This is quite a deflating report," said Nick Bunker, economic research director at Indeed Hiring Lab. "The hope was that August was an anomaly but the fact is, the delta variant was still with us in September."
Experts say there are a number of factors to blame for the lower-than-expected report, including the persistent spread of COVID-19 and a worker shortage, evidenced by rising wages and stagnant labor force participation rate.
US ECONOMY ADDED 194K JOBS IN SEPTEMBER, MISSING ESTIMATES
"This year has been one of false dawns for the labor market," Bunker said. "Demand for workers is strong and millions of people want to return to work, but employment growth has yet to find its footing. Hopefully, the current decline in Covid case counts continues. That seems to be the only way out of our current situation."
Although the unemployment rate ticked down to 4.8% – a pandemic low – it largely reflects the labor force shrinking by about 183,000 workers.
Still, the jobs report is slightly backward looking: The survey was conducted the week of Sept. 12 – just as COVID-19 cases peaked in the U.S. Since then, the infection rate has slowed with cases dropping below an average of 100,000 a day.
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That also means the expiration of three federal unemployment benefits on Labor Day, which cost millions of Americans their jobless aid, likely had little effect on this report.
"The September jobs report is a slight glimpse in the rearview mirror. Cases of COVID-19 have dropped significantly since the beginning of September and the labor market is likely to return to the same place it was before the delta surge," said Daniel Zhao, senior Glassdoor economist.
Zhao added: "As we head into the fall, the resumption of school reopenings and expiration of UI benefits may push some workers back into the labor force, but red-hot labor demand is likely to keep labor shortages top of mind for employers."