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Another disappointment: US economy adds only 194,000 jobs in September

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Another disappointment: US economy adds only 194,000 jobs in September

A Now Hiring sign hangs near the entrance to a Winn-Dixie Supermarket on September 21 in Hallandale, Florida. Friday's jobs report will shed some light on whether August's disappointing numbers were just a blip — or the start of an unwelcome trend.

America's economic recovery has hit a roadblock: US employers added only 194,000 jobs in September, another troubling sign that Covid is disrupting the economy.

It marked the second-straight month in which the US economy added far fewer jobs than expected. Jobs growth slowed down dramatically in August.

The unemployment rate declined to 4.8% in September, the Bureau of Labor Statistics said Friday, down from 5.2% in August. Joblessness declined across the board, with the Black unemployment rate falling the most of any group -- to 7.9% from 8.8% in August.

But, if you're an optimist, there is reason to be hopeful about the future: The surveys behind the jobs report were completed around the middle of September when Covid infections began to plateau. They have been on a steady decline since mid-September, a reason to be optimistic about job growth in October.

And the report had some good news: The disappointing August report was revised higher by 131,000 jobs, which means employers added 366,000 the month before last. (Even so, the August report remained far below analysts' initial expectations.)

"The weak jobs report shouldn't be a surprise given the survey for it was taken near the peak of the Delta variant wave on September 12," said Robert Frick, corporate economist at Navy Federal Credit Union. "Hundreds of thousands of jobs that could have been added in the leisure and hospitality industry alone had to wait until coronavirus infections and deaths dropped, as is happening now."

Daniel Zhao, senior economist at Glassdoor wouldn't even go as far as calling the report a mixed bag.

"On the one hand, this shows us how big the impact from the Delta variant really was... but hopefully with the Delta wave receding the September report will be the worst of it," he told CNN Business.

Mixed signals

In the late summer, rising Covid-19 infections from the Delta variant kept people at home. Many grew wary of spending time in large groups.

Hiring in restaurants and bars was thin last month as customers avoided travel and dining. Leisure and hospitality employers added just 74,000 jobs last month, far underperforming the industry's monthly average gain of 197,000 this year. The leisure and hospitality industry bore the worst of the pandemic-linked layoffs last year.

Another sector that didn't do great in September was education. Employment in local government education dropped by 144,000 and another 17,000 in state government education. Education is a major employer of women, so that added concerns about equality in the labor market recovery. More women dropped out of the labor force than men last month.

But there's some seasonal weirdness at work, the BLS warned in it's report. Because the back-to-school hiring that normally occurs in September was lower this year, the seasonally adjusted jobs numbers showed a decline.

"Recent employment changes are challenging to interpret, as pandemic-related staffing fluctuations in public and private education have distorted the normal seasonal hiring and layoff patterns," the BLS said.

We already know this pattern from last year, said Zhao, so it shouldn't have come as a surprise.

"I think many schools are still running with a leaner workforce than before the pandemic," Zhao said.

Hiring picked up at the end of the month, though, according to Frick, who expects that trend to accelerate through October.

The-CNN-Wire

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