Bullish business leaders, economists and policymakers were banking on a September surge of hiring with the end of extended unemployment benefits, schools reopening and continued vaccinations. But those bets went bust after the latest release of monthly employment figures showed another month of lackluster hiring.
“Many people had Sept. 1 marked on their calendars as the day when things would go back to normal — when they would return to their offices, their kids would return to school and they’d head back to their favorite bars. But instead, the recovery sputtered,” said Julia Pollak, a labor economist with hiring site ZipRecruiter.
Continued virus impacts dragged down expectations for a hot September jobs report Friday, with only 194,000 jobs added, versus 500,000 expected.
President Joe Biden put a positive spin on the numbers in a news conference Friday afternoon, highlighting the upbeat statistics: The unemployment rate is down to 4.8 percent, unemployment for Black Americans and Hispanics is down and the drop of 496,000 in long-term unemployment is the second-largest single-month decline in history, with the largest being in July.
“We're actually making real progress,” Biden said. “Maybe it doesn't seem fast enough. I’d like to see it faster, and we're going to make it faster. Maybe it doesn't appear dramatic enough. We're making consistent steady progress, though.”
But it’s still the delta economy. Even if the variant has crested, the totals are still high, with the recent seven-day new case average down from its peak of 175,000 to just under 100,000.
With children under 12 unvaccinated and the risk of even vaccinated adults catching and transmitting the more contagious variant, Americans aren’t eager to go out for shopping sprees or to dine out, or to work the cash registers or clean hotel rooms.
Economists were hoping to see recovery in sectors hardest hit by the pandemic — but those gains failed to materialize, with just 56,000 jobs added in retail last month and 74,000 in leisure and hospitality.
Female labor force participation was expected to go up as reopened schools eased child care issues for some, but the number actually fell from 56.2 percent to 55.9 percent.
Vice President Kamala Harris said Friday in remarks at a child care center in Little Falls, New Jersey, that “child care deserts” in America created “clear and well-known disparities” between families that have only become more pronounced during the pandemic.
“There was a certain level of enlightenment about issues … failures and fractures and fissures in our systems for a long time,” Harris said. “But it became apparent one of them was the accessibility and affordability of child care and also the disproportionate responsibility that women and families take when the resources are stretched thin.”
Federal Reserve Chairman Jerome Powell has said he is looking for a “decent” jobs report before the central bank starts easing some of the accommodative monetary policies that have pumped money into the economy to keep families and businesses afloat during the pandemic.
While the jobs report does contain some positives — labor demand is strong, with average hours worked and hourly income up — it is clear that underneath the health concerns is strong economic demand, held down like a kickboard underwater. But it will take beating the virus back further for it to resurface.
"The declines in the unemployment measures and the participation rate show that the movement of people back to the labor force has paused," said Brad McMillan, chief investment officer for Commonwealth Financial Network. "While this is clearly a concern, it also ties quite closely to the recent delta wave of the virus, and the trend could well improve now that the medical news is improving. The biggest problem is not that growth has slowed; it is that people are still scared to go back to work."
