US job growth fell to its slowest rate in September despite the federal unemployment benefits expiring for millions, The Wall Street Journal reports.
The economy added just 194,000 jobs last month, the lowest increase this year. The Dow Jones had projected that the economy would add about 500,000 jobs. The US added 366,000 jobs in August.
Data from the Labor Department shows that many workers gave up searching for a job or exited the labor force in September despite businesses struggling to hire. As a result, the official unemployment rate actually fell from 5.2% in August to 4.8%.
“This was the time when a lot of people were expecting labor shortages to be getting better but in fact they’re getting worse,” Michael Pearce, senior U.S. economist at Capital Economics, told the Journal. “It’s a pretty worrying situation.”
Stocks dip:
The stock market fell after the release of the jobs report as observers worry about the effect it will have on the economic recovery, which is already struggling due to inflation and supply constraints.
The disappointing report comes despite job openings rising a record high.
But many workers who left the workforce during the pandemic, whether due to the risk of infection, child care needs, or other concerns, have not returned to the labor market.
Many of those workers cite the risk of getting sick as their reason not to return, showing the effects the Delta variant has had on the recovery.
Delta cases have been particularly impacting low-vaccinated states, though numbers have dropped nationally since the spike over the summer.
Wage growth ticks up:
The average hourly pay for private-sector workers increased slightly to 0.6% in September, suggesting a tight labor market.
Wages are up 4.6% on the year.
But higher wages also add to concerns about inflation as costs have increased. In some cases, inflation has effectively wiped out wage gains.
Businesses have tried to offer higher wages to attract applicants.
“You can’t find the employees to ramp it up,” Ann Silver, head of the local Chamber of Commerce in Reno, Nev, told the Journal. “We’re hearing that from every sector—hospitality and touring, healthcare, you name it. People can’t be found. Everybody’s quick to say, ‘Wow, the economy is rebounding.’ Well, it can’t without human beings.”
