Thu, Dec 09, 2021 @ 08:16 GMT
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US: Another Disappointing Month for Hiring in September, but Unemployment Rate Falls to 4.8%

Hiring disappointed expectations in September gaining only 194k jobs. Softening the blow somewhat, August’s tally was revised up to a +366k gain (versus 235k previously). July was also revised up, for a combined 169k more jobs than previously reported.

The unemployment rate dropped more than expected to 4.8%, as job gains in the household survey were stronger at 526k. The number was also flattered by a 0.1 percentage point drop in the participation rate and 338k leaving the work force in the month.

As of September, nonfarm payroll employment was down 3.3% from its pre-pandemic (February 2020) level.

Employment gains were seen in leisure and hospitality (+74k), led by gains in art entertainment and recreations (+43k). The sector remains down 9.4%, or 1.6 million jobs, versus pre-pandemic levels.

Once again, job gains were up strongly in professional and business services (+60k). Gains were also seen in retail trade (+56k), transportation and warehousing (+47k), information services (+32k), manufacturing (+26k), and construction (+22k). Notably, employment in transportation and warehousing is now 1.2% higher than it was pre-pandemic.

Employment decreased by 144k in local government education, 17k in state government education and 19k in private education. Back-to-school hiring was lower than usual in September, resulting in a decline after seasonal adjustment. The pandemic has distorted seasonal hiring patterns in education, but overall employment in education remains well below pre-pandemic levels.

Key Implications

August’s delta-driven slowdown in hiring appeared to carry over to September, further held back by 180k jobs lost in education. While September’s number was disappointing, it wasn’t terrible. Most sectors saw gains, and the unemployment rate continued to tick down. September’s tally is unlikely to stay the Fed’s hand on starting to taper asset purchases in November.

The persistent gray cloud on the labor market recovery has been the slow improvement in labor force participation. This bears watching as it is likely exacerbating many of the labor shortages that are occurring in different sectors, and could constrain the pace of hiring going forward.

TD Bank Financial Group
The information contained in this report has been prepared for the information of our customers by TD Bank Financial Group. The information has been drawn from sources believed to be reliable, but the accuracy or completeness of the information is not guaranteed, nor in providing it does TD Bank Financial Group assume any responsibility or liability.

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