According to companies, this is the tightest labor market for decades.
The Labor Department reported Friday that September saw a disappointing 194,000 job increase by employers. This was well below expectations. It also marks the second weakest month in a row.
The unemployment rate fell to 4.8%, from 5.2% in the previous year.
This number was below the expected 500,000 jobs, and it follows the mere 235,000 jobs that were added in August. The private sector added 317,000 jobs, while government employment declined by 123,000.
ADP, a private payroll company, reported Wednesday that 568,000 new jobs were created. On Thursday, 326,000 first-time unemployment claims were received, surpassing expectations.
Nearly 11 million jobs are available, but businesses have difficulty filling them. More than 18 million jobs have been filled since the coronavirus pandemic, which resulted in 22 million job losses. However, the recovery has not been complete. Women and minorities have suffered from a slower rate of job creation than those with a college education.
This is the tightest labor market for decades due to changes in the country’s demographics as well as technological advances and restrictive immigration policies.
Mark Hamrick, Senior Economic Analyst at Bankrate, stated that the expected path forward for both the economy and the job market is fairly positive. “There is still a greater-than-normal level of uncertainty. It was believed that the economy would have resumed its normal pace of growth by the time it reopened. The recovery was slowed by new plot twists, including supply chain problems and the Delta variant.
As the Federal Reserve Board seeks to end its monetary support for the economy, the September weak number will make matters more complicated. Analysts believe the central bank will soon begin curbing its $120-billion-per-month purchases of Treasuries and mortgage-backed securities which have kept interest rates subdued. However, this is dependent on the continued improvement of the labor market.
Steve Rick, chief economist of CUNA Mutual Group, says that it is disturbing to see September’s jobs numbers not meet expectations. People were hopeful that fall reopenings would bring about an economic recovery. “Unfortunately, this is not surprising given the disappointing August report and persistent uncertainty surrounding COVID variants.”