Friday’s payrolls report has revealed that in the month of September, the United States added only 194K jobs.
This number is lower than the lowest of all but only one of the 71 economist that forecast what the number would be.
September payrolls were also lower by almost half from the upward changed 366K in August, the first back-to-back monthly lowering in payrolls in 2021 and the lowest of 2021. This is likely hurting the Fed’s tapering plans as this number was so terrible as to be said to be a “major shock.”
And this is even as the BLS admits the big reason for the lowering was a seasonal adjustment in local education, which might have pulled the number down by around 150K.
Putting this bad September report into context, so far this year, monthly job expansion has averaged 561,000, about half of what Fed officials promised at the beginning of the year. Nonfarm employment went up by 17.4 million since a recent low in April of last year but is down by 5.0 million, which is around 3.3 percent, from its pre-pandemic numbers of Feb. 2020.
In September, notable gains happened in hospitality and leisure, in business and professional services, in retail trade, and in warehousing and transportation. Employment in education went down over the month.
The rise in hourly earnings shows that wage growth is staying solid even with expectations that as millions of Americans no longer have emergency benefits they will also flood the labor force with fresh supply. Clearly this has not occurred yet.
Some more details from this report: workers not able to work because of bad weather was 94K, slightly more than the historical average for September which is 83k. Connected to this are 404k workers who normally work full-time might only work part-time because of the weather.
Commenting about the report, Blackrock official Jeffrey Rosenberg said that “It has a delta-variant characteristic to it, like what we saw last month.The key sectors that point to the virus are leisure and hospitality and then the education sector….Delayed reopenings of schools relative to normal seasons.”
This said, as Bloomberg has noted, the number “is a true problem for the Fed. Not at all what they would have liked to have seen. Inflation pressures are staying acute, but job growth is weakening.”
In other words: does the Fed tighten its policies into stagflation?
Author: Blake Ambrose
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