“It’s very hard to forecast (how the economy) is doing right now especially because of COVID and things happening, but I think if we’re trying to focus on how well it’s doing, maybe just looking at a number of new workers is not enough,” said Dr. Peter Rupert, the director of the Economic Forecast Project at UCSB. “Maybe we have to look at how much they’re working too.”
The U.S. created jobs at a slower pace than expected in September according to a report released Friday from the U.S. Department of Labor Statistics showing that just 194,000 jobs were created last month.
The 194,000 nonfarm payroll employment increase last month fell short of the Dow Jones estimate of 500,000 jobs, according to national reports. Friday’s report also showed that the unemployment rate fell to 4.8% in September, which is better than the expected rate of 5.1% and the lowest rate recorded since February 2020.
According to Friday’s report, leisure and hospitality (+74,000), professional and business services (+60,000) and retail trade (+56,000) industries led job creation last month, adding over 190,000 jobs combined. Increases were also reported in the transportation and warehousing industry (+47,000), as well as in the information (+32,000), social assistance (+30,000) and manufacturing industries (+26,000). The total private payroll increase was over 317,000 jobs.
These gains were offset, however, by the loss of 123,000 jobs under government payroll. Local government education, state government education and private education had the highest losses last month, according to Friday’s report.
In response to the jobs report, President Joe Biden delivered enthusiastic comments from the White House on Friday, encouraging the American people that the report signifies that “consistent, steady progress” is still being made.
During his remarks, the president drew attention to the fact that the unemployment rate is down for Black (7.9%) and Hispanic Americans (6.3%) and that the 496,000 decrease in long-term unemployment is the second-largest single-month decline in history.
“The monthly totals bounce around, but if you take a look at the trend, it’s solid,” Mr. Biden said Friday.
“Today’s report has unemployment 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 the COVID pandemic,” Mr. Biden later added. “Jobs up, wages up, unemployment down — that’s progress.”
While some economists and business leaders were disappointed by Friday’s jobs report, Dr. Peter Rupert, the director of the Economic Forecast Project at UCSB, told the News-Press that the report is not as bad as it appears when examined in its full context.
For him, the most striking part of Friday’s report was not the overall number of jobs added, but the increase in the average number of hours worked. According to the September report, average workweek hours for employees nationwide increased by 0.2, increasing the average to 34.8 hours.
Compared to August — where workers worked about 34.6 hours a week on average — about 36 million additional hours of work were added during the month of September, Dr. Rupert said. This, in turn, translates to about a million extra workers if you take the 36 million divided by the average hours worked, Dr. Rupert added.
While many economists on Friday were largely focused on September’s overall growth, Dr. Rupert said he believes the 194,000 jobs number is “irrelevant” when considering how many millions more hours were worked last month.
“It’s very hard to forecast (how the economy) is doing right now especially because of COVID and things happening, but I think if we’re trying to focus on how well it’s doing, maybe just looking at a number of new workers is not enough,” Dr. Rupert said. “Maybe we have to look at how much they’re working too.”
“Focusing on that 194,000 number is not that relevant for some of the things we want to look at,” he added. “If the average hours had stayed that same, I may have said this was a disappointing report, but when you multiply, you can see how many hours are being added to the U.S. economy.”
In terms of the nation’s recovery, Dr. Rupert said the recent uptick in cases associated with the COVID-19 delta variant likely made the comeback “a little slower” than if there had not been another spike. He said the economy has seen its ups and downs throughout the pandemic but believes it’s too soon to say the U.S. is experiencing a “sluggish recovery.”
email: mhirneisen@newspress.com
