President Joe Biden continues to get bad news as Friday’s job figures mark a new problem for an already struggling administration.
September’s jobs report numbers have been described as the “worst” of the year thus far while also indicating that the country’s labor shortage is “getting worse.”
“The economy created 194,000 jobs in September, the smallest gain since December 2020 and down from 366,000 jobs added in August,” The Wall Street Journal reported.
“Many workers gave up a job search and exited the labor force last month. The smaller pool of labor meant that despite the slowdown in hiring, the unemployment rate fell to 4.8% last month from 5.2% in August,” the paper continued.
Michael Pearce, the senior U.S. economist at Capital Economics, noted that analysts had predicted that labor shortages would be getting better by now “but, in fact, they’re getting worse.”
“It’s a pretty worrying situation,” Pearce noted.
Meanwhile, Obama economist Austan Goolsbee warned on Twitter that “until we can get control of the spread of the virus, we might have multiple months that are disappointing like this.”
But it’s not at all clear that the COVID pandemic is responsible for the continued drop in employment. Some, including many Republicans, have said overly generous unemployment benefits paid out by states and the federal government have kept millions out of the workforce because they get paid better to stay home.
Still, whatever the cause, the problem appears to be getting worse at a time when inflation is also rising to historic numbers.
CNN’s Chief Business Correspondent Christine Romans remarked that the jobs report was “way less, way less than anybody expected,” adding that it was “the worst of the year.”
“This is quite a deflating report,” said Nick Bunker, economic research director at job placement site Indeed, according to CNBC.
“This year has been one of false dawns for the labor market. Demand for workers is strong and millions of people want to return to work, but employment growth has yet to find its footing.”
Nonfarm payrolls rose by just 194,000 in the month, compared with the Dow Jones estimate of 500,000, the Labor Department reported Friday. The unemployment rate fell to 4.8%, better than the expectation for 5.1% and the lowest since February 2020.
There was some good news, however: Wages are rising, CNBC noted, thanks to the labor shortages.
“Labor shortages are continuing to put severe upward pressure on wages … at a time when the return of low-wage leisure and hospitality workers should be depressing the average,” wrote Andrew Hunter, another U.S. economist at Capital Economics.