Washington – US employers added just 194,000 jobs in September, a second direct gain and evidence that the pandemic is still taking hold of the economy, with many companies struggling to fill millions of open jobs.
Friday’s report from the Labor Department also showed that the unemployment rate fell sharply to 4.8% from 5.2% in August.
The economy is showing some signs of emerging from the drag of the delta version of the coronavirus, with new COVID-19 infections confirmed, restaurant traffic rising slightly and consumers eager to spend.
But new infections remained high as September began, and employers are still struggling to find workers as many of those who lost jobs in the pandemic have yet to start looking again. Supply chain bottlenecks have gotten worse, slowing factories, halting homemakers and emptying some store shelves.
Many economists still think that the nearly 3 million people who lost jobs and stopped looking for work as the pandemic hit would resume their search as COVID wanes. 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. The government does not consider people unemployed unless they are actively looking for jobs.
Some of the factors that have kept many unemployed people on edge are beginning to subside. For example, according to a Census Bureau survey, the number of people not working because of staying at home to care for a child fell by half in September compared to June. This figure had barely dropped last time, when many schools remained closed and conducted virtual education. New census data suggest that more parents, especially mothers, may have joined the workforce in the past month after the school year begins and their children return to school.
FILE – A shift manager operates a forklift inside the production floor at a rubber recycling company on October 4, 2021 in Colton, Calif. (Mel Melkon/Los Angeles Times via Getty Images)
Furthermore, an August survey by a job listing website actually found that the proportion of unemployed Americans who said they wanted to find a job after the school year began had more than doubled compared to just two months ago.
Yet there are signs that it is too early to expect the flood of parents to rejoin the labor market. Lyle Brainard, a member of the Fed’s board of governors, noted in a recent speech that the COVID-19 outbreak at the end of September closed 2,000 schools for an average of six days in 39 states.
Several increased unemployment benefits ended in early September, including a $300-per-week federal supplement, as well as programs that cover first-time gig workers and those unemployed for six months or more. Huh. So far, the termination of those programs has had little effect on the number of people seeking work.
The governors of about 25 states ended the $300 benefit in September before ending nationwide. Research by economists at Goldman Sachs found that unemployed people who were looking for work were more likely to take a job when benefits ended. But the initial cut-off didn’t make people start searching again, Goldman concluded.
Another reason workers are scarce is the rise in retirement among older, more affluent workers, whose home equity and stock portfolios have grown since the pandemic and who have managed to build up savings. Goldman Sachs estimates that there are about 1.5 million retirees who would not have had the economy recover before the pandemic. Economists expect many of these people to remain retired.
Meanwhile, the fear of COVID keeps some job-seekers on edge, especially those who previously worked in public-facing service jobs at restaurants, bars, hotels and retailers.