Delta wave tossed wrench into US job market in September
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Washington (AFP) –
The US economy was predicted to add hundreds of thousands of jobs last month but instead gained only 194,000 as the Delta variant of Covid-19 again denied President Joe Biden the soaring labor market he is banking on -- at least for now.
Schools shed jobs and the bars and restaurants that have become a barometer of the virus' threat to business added barely any positions in the Labor Department's September employment report, which at best presented a mixed verdict on the state of the world's largest economy.
Nonetheless, it underlined that the United States has come a long ways from the devastating weeks last year when Covid-19 caused tens of millions to lose their jobs; the unemployment rate ticked down more than expected to 4.8 percent, and the last two months' jobs gains were revised upwards.
Biden has been banking on an economic revival to build support for his presidency-defining spending bills while also fending off the Republican opposition's attempts to use the country's debt limit to make him retreat, and the data underscores how the virus's fast-spreading variant may complicate those plans.
"The jobs numbers are worse than we would like but better than they look," Jason Furman, who teaches economics at Harvard University after working in Democratic former president Barack Obama's White House, said on Twitter.
Analysts agree on one thing: the data is likely enough for the Federal Reserve to begin slowing its massive purchases of bonds and securities meant to help the country through the pandemic, as they signaled they could do later this year.
"With debt ceiling shenanigans pushed back until December 3, the road is clear for an announcement at the November" meeting of the Fed's policy committee, Lydia Boussour of Oxford Economics said.
- Back from the depths -
The monthly jobs data have become progress reports for the United States' bounceback after more than 20 million jobs were lost to Covid-19, and the September report showed the economy had regained 17.4 million positions since the downturn's nadir in September 2020.
However there were still five million positions missing, with job growth averaging 561,00 per-month this year and fluctuating significantly.
In July, the economy added an upwardly revised total of nearly 1.1 million positions. But that was before Delta struck, pushing job growth down to 366,000 in August, though that, too, was revised higher in Friday's report.
Industries that bore the brunt of the pandemic suffered in September, with food and drinking places adding barely any positions for the second straight month after averaging gains of 197,000 between January and July.
The overall leisure and hospitality sector employment rose 74,000 positions, professional and business services added 60,000 jobs, retail trade gained 56,000 and transportation and warehousing rose 47,000.
- Shortfall at schools -
Schools appeared to shed workers and hold back overall jobs gains, with local government education employment falling 144,000 and state government education shedding 17,000 positions during the season when they typically add staff as the new school year begins, the data said.
There was also little movement in the labor force participation rate indicating the share of the population employed or actively looking for work. It stood at 61.6 percent last month, within the range it has hovered since June of last year.
The US labor market's racial inequalities continued in September, with the Hispanic unemployment rate declining to 6.3 percent and the rate for African Americans falling sharply to 7.9 percent, though both were above the 4.2 percent rate for white people.
In the education sector, the report warned that "recent employment changes are challenging to interpret" and said the pandemic had hit "distorted the normal seasonal hiring and layoff patterns."
Ian Shepherdson of Pantheon Macroeconomics said the shortfall in education hiring was unlikely to repeat as the economy normalized, though the better-than-expected unemployment rate was probably due to both reemployment and people leaving the workforce.
The weak leisure and hospitality hiring likely slowed the employment gains overall, and he predicted "October will be much better, given the continued decline in Delta cases and rising activity in the restaurant, airline and hotel sectors."
© 2021 AFP