Hiring in September slowed significantly as employers added 661,000 jobs, the Labor Department said Friday.
The figures fell short of economists’ expectations, who had expected about 850,000 new jobs to be created in September. It was the first month since April when net job creation dropped below 1 million. So far, about half of the 22 million jobs lost in March and April have returned.
“September was the 7th month of the COVID crisis in the U.S. labor market, and the situation is dire,” Heidi Shierholz, director of policy at the Economic Policy Institute, said on Twitter. “Not counting temporary census jobs, our jobs deficit is now 11.0 million jobs.”
Shrinking labor force
The unemployment rate fell to 7.9% in September, down from 8.4%. Yet that decline was mostly driven by nearly 700,000 people exiting the labor force.
The jobless rate fell to 7% for White workers, 12.3% for Black workers and 8.9% for Asian workers, but Hispanics’ unemployment stayed roughly flat at 10.3%.
“[T]he true unemployment rate right now is anyone’s guess. What matters is the speed with which the lost jobs in the payroll survey are being recovered, so the fading momentum in recent months is discouraging,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a note.
Among the unemployed, the portion who are temporarily laid off is shrinking while the number of permanently unemployed people rises, noted Robert Frick, corporate economist at the Navy Federal Credit Union. “This underscores that job gains from here on will be tougher, and speaks to the need for more stimulus to help the economy,” Frick said in a note.
This is the last jobs report released before the November 3 election. This week saw a spate of job-cut announcements from major employers, including airlines, Disney theme parks and the insurer Allstate.