U.S. job growth slows sharply in September; unemployment rate falls to 4.8%

- Advertisement -

WASHINGTON, Oct 8 (Businesshala) – US employment grew much less than expected in September amid a drop in government wages, but hiring could rise in the coming months as COVID-19 infections ease and people return to work. Start the search again.

- Advertisement -

The Labor Department said in its closely watched employment report Friday that non-farm payrolls increased by 194,000 jobs last month. The data for August was revised to create 366,000 jobs instead of the 235,000 already reported.

- Advertisement -

Economists polled by Businesshala had forecast an increase of 500,000 jobs in the payrolls. Estimates ranged from 700,000 jobs to as low as 250,000.

The unemployment rate fell from 5.2% in August to 4.8%.

- Advertisement -

The modest gains in jobs could dampen expectations of a sharp pick-up in economic growth after an apparently sharp slowdown in the third quarter. The labor market and economy are constrained by the shortage of workers and raw materials due to the pandemic.

COVID-19 infections in the United States are declining, with an average of 100,815 new infections recorded each day, according to an analysis of data from state and local governments as well as data from health officials.

The September employment report is only available ahead of the Federal Reserve’s November 2-3 policy meeting. The US central bank indicated last month that it may begin reducing its monthly bond purchases as early as November.

Fed Chairman Jerome Powell told reporters that “it will take a pretty good employment report” for the central bank’s massive bond-buying program to meet the threshold.

The economy hit momentum in the third quarter on the back of a summer outbreak of coronavirus cases, a slowdown in the flow of pandemic relief funds from the government and scarce raw materials, which have hit motor vehicle sales.

The Atlanta Fed estimates that GDP growth in the July-September quarter hit a 1.3% annualized rate. The economy grew at 6.7% in the second quarter.

Schools have fully reopened for in-person learning, which is expected to enable more people, especially women, to rejoin the labor force.

In the coming months, there is cautious optimism that the labor squeeze may ease after the federal government-funded benefits expire in early September. Expanded Benefits, which offered unemployment checks to people who didn’t qualify for regular state jobless benefits, were blamed by businesses and Republicans for the labor shortage.

There were a record 10.9 million job opportunities by the end of July. But it appears that many unemployed have accumulated some money from the government, and hence they are in no hurry to start looking for a job.

Labor force participation rates, or the proportion of working-age Americans who have a job or are looking for one, barely moved, even as nearly 25 states led by Republican governors expanded over the summer. benefits terminated.

Some economists say a significant portion of those out of the labor force have retired, thanks to a strong stock market and record house price gains, boosting household wealth. Self-employment has also increased.

Reporting by Lucia Mutikani Editing by Chizu Nomiyama


- Advertisement -

Stay on top - Get the daily news in your inbox

DMCA / Correction Notice

Recent Articles

Related Stories

Stay on top - Get the daily news in your inbox