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Job Market Recovery Continues Despite Delta Variant

By D. Mark Wilson posted 10-08-2021 16:32

  

Employers added 194,000 jobs in September and the unemployment rate dropped to 4.8% as the labor force participation rate for 35 to 44 year-olds and 55+ (boomers) remains disappointingly low.

Technical seasonal adjustment issues held down the top-line payroll job growth number.  Local government education jobs rose less than seasonally expected after not falling as much as expected in June and July.

Private sector jobs rose 317,000 in September after rising 332,000 in August and 816,000 in July.  Slower job growth is directly related to the Delta variant.

Good news on the household front:  The BLS household survey, which often diverges from the business payroll survey numbers, has shown an increase of over one million jobs since July and the number of unemployed Americans has dropped by over one million.

The labor force participation rate for most age groups is back to 2018 levels except for 35 to 44 year-olds and 55+ (boomers), which likely reflects the impact of Delta (schools and day care issues) and retirements. 

There are still 5.0 million fewer jobs in the U.S. than before the pandemic and 959,000 more people who say they want a job but are not in the labor force.

Wages increasing but workers are worse off:  Even though wages increased, real average hourly earnings decreased 0.9% from August 2020 to August 2021, and real average weekly earnings decreased 0.9% as inflation outstripped wage gains.

Industries with the largest gains in September include:

  • Retail (+56,000),
  • Professional and technical services (+55,500),
  • Arts, entertainment, and recreation (+43,000),
  • Information (+32,000),
  • Social assistance (+29,800), and
  • Bars and restaurants (+253,200).

Most other industries were little changed except for health care (-17,500) and education services (-18,900).

Looking ahead:  At the current pace of job growth, it will take until June 2022 before all the jobs lost to COVID are restored.  Economists are forecasting continued monthly job increases of 500,000 for the rest of 2021 and an average 321,000 jobs per month in 2022.

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