Only 194,000 jobs were created in the US economy in September, badly missing expectations and adding further gloom and uncertainty to the economic outlook.
A Dow Jones estimate had predicted an increase of 500,000 nonfarm payrolls in the month, but Department of Labor figures released on Friday disappointed.
The lacklustre figure adds to continuing concerns over the Delta variant of Covid-19, logistics and supply chain bottlenecks, dysfunction in Washington, and high inflation, to cloud what many thought would be a buoyant time for the economy as the pandemic recedes.
Speaking on CNBC, economist Austan Goolsbee, former chairman of the Council of Economic Advisers under President Barack Obama, comments: “Until we can get control of the spread of the virus, we might have multiple months like this, because not just the logistics, which are problematic on a sector by sector basis, but overall demand if people can’t go out and spend”
He adds: “Let’s hope that this downturn in cases is going to persist and we can get it back under control.”
The Labor Department survey week was 12 September, which came just as Covid cases were peaking in the US. Case numbers have since dropped significantly to below an average of 100,000 per day, so economists will eagerly await October figures to see if this shifts sentiment and people are able to return to work.
A positive number from the September data was that the unemployment rate fell to 4.8 per cent, against an expectation of 5.1 per cent. The number of unemployed persons fell by 710,000 to 7.7 million.
Both measures of unemployment are down considerably from their highs at the end of the February to April 2020 recession.
However, they remain above their levels prior to the coronavirus pandemic (3.5 per cent and 5.7 million, respectively, in February 2020).
The new hires figure for September follows a disappointing number in August when an abrupt slowdown in hiring first indicated that the Delta variant was having a significant impact on the US economy, in addition to its impact on the health of the nation.
Just 235,000 jobs were added in August according to the Bureau of Labor Statistics, coinciding with the startling increase in coronavirus cases and deaths across much of the South and Midwest.
Economists had been hoping for an increase of three times that number, with 725,000 new hires forecast.
More follows…
