US jobs growth unexpectedly weak in September
World’s largest economy adds just 194,000 jobs, even as unemployment rate falls to 4.8%
The pace of US jobs growth stalled for a second straight month, raising questions about whether the Federal Reserve can begin scaling back its enormous pandemic-era monetary stimulus as early as next month.
Employers in the world’s largest economy added just 194,000 jobs in September, falling short of the 366,000 gains posted in August and well below the monthly average of 561,000 since the start of the year. Economists had expected an increase of 500,000.
The unemployment rate declined for the third straight month, however, falling from 5.2 per cent to 4.8 per cent.
The unexpectedly weak report signals that many of the forces holding back employees from returning to the workforce persist, suggesting a rockier path forward for the US economy.
While schools reopened last month, helping to ease some of the childcare issues that have deterred workers, shortages still remain. That has raised concerns that the recovery of the world’s largest economy may be delayed for longer than initially expected.
“We are seeing supply issues remain more ingrained than any of us expected,” said Sarah House, senior economist at Wells Fargo, noting that disruptions related to the Delta variant of the coronavirus are wreaking havoc on the labour market recovery.
“It takes time for people to change their thinking about the risks of going back to work . . . [and] even though kids have started school, there are questions over how consistently they will be back,” she added.
In remarks on Friday, president Joe Biden noted that the report covered a period when Delta cases were far higher than current levels. “Jobs up, wages up, unemployment down. That’s progress,” he said.
He also reiterated his appeal to Congress to pass his spending plan, warning that “we risk losing our edge as a nation if we don’t move.”
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Author: H. A. Goodman