US economy adds 194K jobs in September, missing estimates

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Unemployment rate fell to 4.8%

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US employers hired fewer workers than expected last month as supplemental unemployment benefits ended.

The Labor Department said Friday that non-farm payrolls increased by 194,000 workers in September as the unemployment rate fell to 4.8%. Economists surveyed by Refinitiv were expecting 500,000 new jobs to be added and the unemployment rate to slip to 5.1%.

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The jobs gain was revised from 235,000 to 366,000 in August.

“The labor market continues to improve this month, but is far from completely halting,” said Daniel Zhao, senior economist at Glassdoor. “Despite the soft September report, there is still a case for optimism in the coming months, as we begin to look in the rearview mirror, and the peak of delta wave results is behind us.”

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The September report was the first since $300 per week in supplemental unemployment benefits ended September 5. Economists are still assessing the impact of the Child Tax Credit, which pays families up to $3,600 per child per year. Also having an effect going forward is the increasing number of companies implementing mandatory vaccine requirements.

Notable job gains in leisure and hospitality (+74,000) were led by the arts, entertainment and entertainment sectors (+43,000). After an average monthly profit of 197,000 from January to July, there was little change in fares for food services and drinking places for the second consecutive month. Business and business services (+60,000), retail trade (+56,000), and transportation and warehousing (+47,000) also saw significant gains.

Local government education (-144,000) and state government education (-17,000) both lost jobs last month.

The number of workers re-entering the labor force fell from 198,000 last month to 2.3 million. The labor force participation rate had changed little at 61.6%, and was down 1.7 percentage points from February 2020 levels. The rate has been between 61.4% and 61.7% since June 2020.

Average hourly earnings rose 0.6% in September and rose 4.6% year over year. Economists were expecting 0.4% monthly growth and 4.6% year-on-year profit.

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“After almost looking like a bargain, today’s job numbers raise expectations for a reduction in clutter,” said Principal Global Investors Chief Strategist Seema Shah. “

The Fed will hold a two-day meeting that ends on November 3. At that point, the central bank could announce a plan to reduce its $120 billion per month asset purchases. The rate hike is not expected until the end of next year.


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