Far fewer jobs were added in September than forecasted September's job gains fell short of expectations, with U.S. employers adding just 194,000 jobs. The unemployment rate fell below 5%, but that was in part because people dropped out of the workforce.

Far fewer jobs were added in September than forecasted

Far fewer jobs were added in September than forecasted

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September's job gains fell short of expectations, with U.S. employers adding just 194,000 jobs. The unemployment rate fell below 5%, but that was in part because people dropped out of the workforce.

AILSA CHANG, HOST:

The economic storm clouds that cast a shadow over the job market late this summer didn't get any brighter in the fall. The Labor Department said today that U.S. employers added just 194,000 jobs in September. That's fewer jobs than the month before and way below what forecasters were expecting. This lackluster job growth comes at a time when millions of people are out of work, and yet employers say they have a record number of unfilled openings. What is going on? Well, NPR's Scott Horsley is here to help sort this out.

Hi, Scott.

SCOTT HORSLEY, BYLINE: Hi, Ailsa.

CHANG: All right, so wait. September was supposed to be some kind of, like, banner month for job gains, right? What happened to that?

HORSLEY: Well, delta happened. You know, if you go back to June and July, we saw really robust hiring, adding about a million jobs a month. But that job growth slowed sharply in August, when that new wave of coronavirus infections hit. And while forecasters were expecting a rebound in September when schools reopened and they thought a lot of parents would be free to go back to work, instead, we saw job growth slowing even further. And this is really disappointing because the U.S. still needs to recover almost 5 million more jobs just to get back to where we were before the pandemic.

CHANG: Right, but today's report still shows the unemployment rate fell below 5%, which sounds kind of positive. What's going on there?

HORSLEY: That's right. Unemployment has dropped pretty dramatically from a peak near 15% early in the pandemic to under 5% last month. That was perhaps the silver lining in today's report. Not surprisingly, it's the part of the report President Biden chose to focus on.

(SOUNDBITE OF ARCHIVED RECORDING)

PRESIDENT JOE BIDEN: Today's report has the unemployment rate down to 4.8%, a significant improvement from when I took office and a sign that our recovery is moving forward even in the face of a COVID pandemic.

HORSLEY: Even that comes with a caveat though. The unemployment rate went down, partly because some people found work, which is good. But it also fell in part because other people gave up looking for work, and that's not so good. Ideally, if the recovery were really going well, you would like to see more people coming off the sidelines and both looking for and finding jobs.

CHANG: OK, so let me get this straight. People are leaving the workforce, even though a lot of employers say they would hire more people if they could, which seems kind of contradictory. Can you just explain that?

HORSLEY: Yeah, it's hard to know exactly how much this slowdown in hiring is caused by a lack of jobs or a lack of willing workers. Most likely, it's some combination of the two. No doubt the pandemic did discourage consumers from eating out and going shopping over the summer, and that has meant fewer jobs for restaurant workers and retail employees. At the same time, it's true also that concerns about the pandemic are keeping some would-be workers on the sidelines, leaving employers with openings they can't fill. Now, I should note there could be some statistical distortion in this report. The Labor Department tries to smooth out annual swings when, like, teachers go back to work after summer vacation, and that's been complicated this year by the way the pandemic's played havoc with school calendars. So the picture may not be quite so bad as the headline numbers would suggest.

CHANG: Well, I was just going to ask you. Are things going to get any better? Like, what is the outlook for the job market going forward?

HORSLEY: We hope they'll get better. The most encouraging news is the public health outlook is improving. New COVID cases, hospitalizations and deaths have all declined in recent weeks. That should boost the number of jobs and workers in the future. And that's good because remember; 7 million people lost their unemployment benefits in September, when those emergency programs expired nationwide.

CHANG: Exactly. That is NPR's Scott Horsley.

Thank you, Scott.

HORSLEY: You're welcome.

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