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WASHINGTON – US employers added just 194,000 jobs in September, a second lukewarm gain in a row and proof that the pandemic has maintained its grip on the economy, with many businesses struggling to fill millions of open jobs .
Friday’s Labor Department report also showed that the unemployment rate fell last month from 5.2% to 4.8%. The rate fell partly because more people found jobs, but also because around 180,000 fewer people looked for work in September, meaning they were not counted as unemployed.
Slow job gains in September fell below the modest 336,000 the economy added in August and were the fewest since December, when employers effectively cut jobs.
The economy is showing some signs of the emergence of the trail of the delta variant of the coronavirus, with a confirmed decline in new COVID-19 infections, a slight upturn in restaurant traffic and consumers willing to spend. But new infections remained high in early September. And employers are still struggling to find workers as many people who lost their jobs during the pandemic have yet to start looking again. The persistence of this trend, with job openings at an all time high, has baffled many economists.
Most of them expected September to produce strong job growth with the reopening of schools, freeing parents, especially working mothers, to return to work.
Several improved unemployment benefit programs expired on September 6, potentially offering incentives for more people to look for work. And at least before delta intensified, many companies had planned to return to office work, which would have revitalized still dormant city centers.
Instead, due to the delta variant, many office buildings remain vacant and fears of the disease have rebounded. A Census Bureau survey found that the number of people who were not working because they had COVID or were caring for someone with the disease doubled between July and early September. COVID outbreaks have also temporarily closed some schools, making it more difficult for many mothers to hold permanent jobs.
At the same time, many economists say that as COVID recedes further and Americans resume traveling, dining out, and watching movies, more people will likely re-enter the workforce and hiring will increase. .
“This report is a look in the rearview mirror”, said Daniel Zhao, senior economist at the jobs website Glassdoor, “And I hope that means the worst is behind us, and the worst was just a slowdown in the recovery.”
For now, people like Sarah Neumeier have chosen to stay on the sidelines. Neumeier, 32, of Natick, Massachusetts, who has 3-year-old twins, said she would wait until the end of winter vacation to look for work again.
She had turned down a job as the pandemic intensified in March 2020 because, concerned about their health, she did not want to place her children in daycare. These concerns have not gone away.
“I was waiting for the vaccine” she said. “My boys were premature and we did everything to keep them healthy. I don’t want to compromise this now.
The delta variant has put Neumeier off in another way: His professional background is in event planning, an area that has been devastated by the pandemic and he is unlikely to recover until the delta variant has recovered. is not yet faded.
Neumeier has a lot of company. The proportion of Americans who have or are looking for a job – known as labor force participation – fell in September from 61.7% to 61.6%, well below the level before the pandemic by 63.3%, according to Friday’s report.
The decline in labor force participation occurred entirely among women, suggesting that many working mothers still care for children at home. For men, work participation remained unchanged. Some after-school programs were not yet in place last month to provide all-day child care. And child care has become rarer and more expensive in many cases.
Lael Brainard, a member of the Federal Reserve Board of Governors, noted in a recent speech that COVID outbreaks in late September caused the closure of 2,000 schools for an average of six days in 39 states.
John Lai, managing director of Mister Car Wash, with around 350 locations, said he was looking to hire 500 people over the next three months to add to the company’s 6,000 employees. Mister Car Wash, based in Tucson, Ariz., Has increased his average hourly wage to $ 14.50 an hour since the start of the pandemic and is offering health and retirement benefits. However, it struggles to attract candidates.
“It is certainly the most difficult job market I have ever experienced in my 20 years in the company”, Laï said.
Some of his employees, he said, had to leave to care for children. And despite the end of supplementary federal unemployment assistance, Lai sees little increase in the number of job seekers.
“I think this is the great mystery of the economy”, he said. “The people who are sitting on the sidelines – why are they sitting on the sidelines? “
He suspects that one of the factors is the persistent fear of getting sick at work.
Improved unemployment assistance that ended in early September included a federal supplement of $ 300 per week, as well as programs that, for the first time, covered workers and those without a job for six months or more. The expiration of these programs has cut off aid to around 7 million people.
Many business owners and Republican political leaders have argued that the additional allowance of $ 300 per week discourages some people from looking for work because they could receive more money from unemployment assistance. So far, however, the termination of these programs appears to have had little effect on the number of people seeking employment.
Economists still believe that most of the estimated 3 million people who have lost their jobs and have stopped looking for work since the pandemic hit will resume their research as COVID subsides. It took years after the 2008-2009 recession, they note, for the proportion of people working or looking for work to return to pre-recession levels.
September’s meager job gain will likely still be enough for the Federal Reserve to continue its plans to withdraw its extraordinary aid to the economy, said Lydia Boussour, an economist at Oxford Economics. The Fed is expected to announce in November that it will begin to slow down its bond purchases, which are aimed at lowering rates on long-term lending and encouraging more borrowing and spending.
Tammy Browning, president of KellyOCG, a recruitment agency, said she noticed little urgency in some potential job seekers. Some families have learned to live on less, she said, adjusting to one income while mothers stay at home. Household savings are, on average, still above pre-pandemic levels, in part thanks to stimulus controls.
“I think it will take several months before people come back in force”, Browning said.
One of the factors behind weak hiring last month was a sharp drop in teaching jobs in local government. The number of such jobs fell by 144,000 last month despite the reopening of schools. This drop suggests that many local school systems did not hire as many people as they usually do. Many struggled to find enough bus drivers, cafeteria workers and other support staff.
Most industries added jobs last month, but at a slower pace. Transportation and warehousing, for example, which was boosted by an increase in online shopping, created 47,000 jobs. Manufacturers added 26,000. Restaurants, hotels and amusement parks, however, gained only 74,000 jobs, more than in August but well below the pace of the summer, when they added. hundreds of thousands of workers per month.
Another reason workers are scarce is an increase in retirements among older and better-off workers whose home equity and equity portfolios have increased since the pandemic and who have managed to accumulate savings. . Goldman Sachs estimates that around 1.5 million people have retired, which would not have been the case before the pandemic wreaked havoc on the economy. Many of these people will likely stay in retirement, economists expect.
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