Latest jobs report sheds more light on how the U.S. economy is doing
STEVE INSKEEP, HOST:
We have some grim economic news today. We learned this morning that U.S. employers added just 194,000 jobs last month. Better than losing jobs, I suppose - but that number is way below hopes and expectations. NPR's Scott Horsley is covering this story. Scott, good morning.
SCOTT HORSLEY, BYLINE: Good morning, Steve.
INSKEEP: What went wrong?
HORSLEY: Well, we haven't shaken off delta yet. The late summer surge in coronavirus infections really slammed the brakes on hiring after what had been a really stellar start to the summer. Back in June and July, we were adding an average of a million jobs every month. August's gain was less than half that, and now September's gains smaller still. This is not what forecasters were expecting, but Nela Richardson, who's with the payroll processing company ADP, notes at least we haven't fallen into reverse.
NELA RICHARDSON: I think it's just a bumpy recovery. And it's a recovery that's still linked to the pandemic and to the delta variant.
HORSLEY: Now, what we do know is vaccinations are up. Hospitalizations and deaths are down. So if that positive health trend continues, we should see some improvements in the job market as we move into the fall and winter. You started to see that last month in bars and restaurants, which have been kind of an early warning signal. They added jobs in September after losing jobs in August. I should also say these September numbers may be artificially low. That's because the Labor Department tries to smooth out unusual seasonal hiring patterns like teachers going back to work in the fall, and that's been thrown off this year because of pandemic disruptions in the school calendar. You might remember we saw a jump in school hiring earlier in the summer; that may have also been statistical noise. And now we're seeing some payback last month.
INSKEEP: Useful to keep that in mind - help us clear the noise out of another thing. The unemployment rate fell to 4.8%, which sounds good. But what's it mean?
HORSLEY: Yeah, the unemployment rate fell partly because people found jobs, but also because some people dropped out of the workforce. And that's not what you want to see. If the recovery were really going well, people would be coming into the workforce. Employers had been hoping that the reopening of schools would free up more parents to go back to work. They also hope that the end of pandemic unemployment benefits would force more people back to work. If that's happening, it's certainly not showing up in today's report. Some 7 million people actually lost their jobless benefits in September, when pandemic benefits expired nationwide. And most, like Tom Guffey of Los Angeles, have not yet found new jobs. Before the pandemic, Guffey was a gig worker. He did a lot of odd jobs for people on TaskRabbit. Now he's hoping to move in a different direction.
TOM GUFFEY: I'm still not feeling super safe about going into strangers' home. So working in an environment where there's clear rules around COVID and stuff, that's kind of my first choice.
HORSLEY: Eventually, forecasters do think a lot of the people who lost unemployment benefits will go back to work, but obviously it's going to take time for 7 million people to find new jobs. And that's especially true if we're only adding about 200,000 jobs a month.
INSKEEP: One other thing briefly, Scott - how significant is it that Congress figured out at least a very short-term way to avoid the United States defaulting on its government debt?
HORSLEY: Certainly, it is good that they are avoiding this self-inflicted wound in mid-October that would have made for a very scary Halloween. The Senate agreed to boost the debt limit by $480 billion, but that really only pushes the problem off to December. So we could still be looking at a big lump of coal in people's stockings if lawmakers don't find a more lasting solution. There's actually been a growing chorus of voices this week saying Congress should just do away with the debt ceiling altogether so we don't have these periodic political games.
INSKEEP: NPR chief economics correspondent Scott Horsley. Scott, thanks.
HORSLEY: You're welcome.
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