Unemployment Rate Drops Below 5% for the First Time Since Start of Pandemic
The pace of new job creation slowed for the second consecutive month, with 194,000 new jobs in September, almost half of the prior month’s adjusted figure of 366,000.
The sectors reporting the highest activity in September were leisure and hospitality, professional and business services, retail trade (a reversal of the prior month), and transportation and warehousing, Employment in public education declined.
The unemployment rate improved further, slipping below the 5% barrier, to drop from 5.2% to 4.8%.
A tight talent supply chain again applied upward pressure to pay rates, driving a 19-cent per hour average increase in September. This is the sixth consecutive month that wages have risen, although wide fluctuations across roles and industries make it difficult to fully analyze changes in wages.
The average work week was 34.8 hours.
TEMPORARY JOB TRENDS:
Job loss of 5,200 in September followed an August decrease of 3,700.
WHAT DOES IT ALL MEAN?
While August may have been considered an anomaly in a recovering economy, the continued low rate of job creation in September is somewhat troubling. The good news is the drop in the jobless rate, indicating that more people came in from the sidelines to rejoin the workforce, but they have not necessarily secured employment yet. Demand for talent remains incredibly strong and more people want to return to work, but job creation numbers do not reflect those trends. It is very possible that the labor market is still feeling the effects of the Delta variant, which has weakened recently but not necessarily in time to be reflected in the current jobs report. Experts are optimistic that the situation will begin to move into more positive territory in the fourth quarter, as finding qualified talent remains the number one issue for employers across the nation.
Sources: U.S. Bureau of Labor Statistics (BLS), Steinberg Employment Research, Staffing Industry Analysts, American Staffing Association, CNBC, Business Insider, FOX Business, CNN, The New York Times, Barron’s, USA Today