President Joe Biden said the U.S. economy remains strong after a “disappointing” September jobs report with the United States adding only 194,000 jobs.
He blamed the low number on companies slowing new hires because of the spread of the delta variant of coronavirus. “What we’re seeing is an economic recovery that’s durable and strong,” he said Friday, crediting his own policies including a $1.9 trillion pandemic relief bill earlier this year. “The measures we’ve taken so far have brought America out of an economic free-fall. We are adding jobs, not losing them,” he said.
This, despite some economists predicting as many as 500,000 jobs added. September’s number was the smallest since last December, when employers actually cut the number of jobs.
Not only did September’s number fall far short of projections, it was a significant decrease from the August jobs report, which was already considered disappointing. Only 336,000 jobs were added in August. Both of those numbers are a far cry from July when more than a million jobs were added.
The report shows positive news with the unemployment rate. It continues to fall, dropping from 5.1 percent in August to 4.8 percent in September. The unemployment rate has been steadily falling since its pandemic-high last April. Wages also increased in September.
The disappointing September job report could signify a couple things. First, the labor market is still very tight with a lot of jobs available but not a lot of people looking to take them. Labor participation, which measures the percentage of Americans who either have a job or are looking for one, dropped a tenth of a percent from August to September. It now sits at 61.6 percent, which is well below the pre-pandemic level of 63.3 percent.
Second, despite a decline of new cases in parts of the country, the spread of the Delta variant is still having a negative effect on the economy. Many are still blaming the variant for the sluggish numbers noting the effect it has had on schools and the hospitality industry.
With this new report, it will be interesting to see how the Federal Reserve responds. Last month, Fed Chair Jerome Powell said if the job market maintains steady improvement, the Fed would likely begin tapering its monthly bond purchases by the end of the year. This means some borrowers will have to pay more for mortgages, credit cards and business loans.