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Job creation slowed in September, with just 194,000 jobs added

U.S. adds just 194,000 jobs in September
U.S. adds just 194,000 jobs in September 03:33

Job growth in September undershot expectations for the second month in a row, adding to worries that the spread of the Delta variant and a tight job market are holding back the economic recovery.

Employers added 194,000 jobs last month, the Labor Department said Friday. Economists had expected about 490,000 jobs to be created. 

The nation's unemployment rate fell to 4.8%, from 5.2%, due to more unemployed workers finding jobs as well as people leaving the labor force, meaning they are no longer counted as unemployed since they are not actively seeking work. The labor-participation rate, a measure of people working or searching for work, ticked down to 61.6% in September, from 61.7% in August.

"This is quite a deflating report," Nick Bunker, economic research director at Indeed, said in a note. "The hope was that August was an anomaly but the fact is, the Delta variant was still with us in September. One optimistic interpretation is that COVID-19 case counts are receding, so future months should be stronger. But the reality is that we are still in a pandemic."

Job growth has been slowing since its summer surge. Employers added more than 1 million jobs in July yet just 366,000 in August, according to revised Labor Department figures. Total payroll jobs today are still 5 million below their pre-pandemic levels.

Education hiring in September was lower than expected, leading to a loss of 144,000 jobs on a seasonally-adjusted basis.

"Despite schools reopening through much of the county and bus drivers being on the roads, schools did not even bring back anything close to the usual seasonal numbers, the full complement of cafeteria workers and bus drivers and janitors — all those folks who weren't on payrolls last year when schools were virtual," said Julia Pollak, labor economist at ZipRecruiter.

That loss offset a relatively robust gain of 317,000 private payrolls, with gains in leisure and hospitality, professional and business services and retail.

Women's work suffers

Women's employment fared much worse than men's in September, with women losing 26,000 jobs while men gained 220,000. The labor force participation rate for women also dropped to 55.9%, from 56.2% in August, while that of men stayed steady.

"[O]ver the past two months progress at bringing women back has significantly slowed relative to men," Betsey Stevenson, a labor economist at the University of Michigan, said on Twitter.

The lag in women's job gains partly reflect sluggish growth in education and caregiving fields. Employment in child care services, which has been recovering from its pandemic plunge, stalled over the summer and actually fell slightly in July and August, according to Labor Department data.

"We've lost a lot of quality child care, and we didn't have enough before the pandemic," Jane Oates, president of WorkingNation, told CBS MoneyWatch this week.

Gains for the employed — and long-term unemployed

While employers are not hiring as much as economists had hoped, they're doing as much as possible with the workers they do have. The average workweek increased in September, and wage growth accelerated.

"Employers have managed to get by by relying on the workers they have, by increasing hours, and also by ... replacing labor with other things like websites, recorded message systems, self-installation and DIY self-assembly products," Pollak said.

The number of long-term unemployed — people who have been out of work for half a year or longer — also fell in September. Since June, the number of long-term unemployed workers has dropped by 1.3 million.

"People who have left the labor force entirely don't seem to be coming back yet, but the long-term unemployed, people who have been sending out hundreds of resumes, now seem to be getting matches in pretty large numbers," said Pollak.

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