U.S. Economy Added Nearly 300,000 Fewer Jobs Than Projection
By Jason Hall
October 8, 2021
The U.S. economy added just 194,000 jobs in September, a total that was nearly 300,000 less than its projected total.
The Bureau of Labor announced the statistics Friday (October 8), which were significantly less than the increase of 500,000 expected by economists.
Additionally, the unemployment rate fell from 4.8% to 5.2%, with economists previously projecting a drop to 5.1% prior to the data being released.
The department has focused on wage growth as a metric for monitoring rising prices, supply chain bottlenecks and what makes inflation "transitory."
Throughout the pandemic, the collapse of the leisure and hospitality industry has led to millions of employees to lose low-wage, service-sector jobs amid COVID-19 shutdowns, with some arguing that the disappointing number of new jobs in August were due to flat leisure and hospitality jobs, after previously averaging an increase of 350,000 new jobs each month during a six-month span.
But even with the prior labor market growth, average hourly wages continued to climb and a worker shortage has played a major factor in the sudden halt in job growth, according to Ross Mayfield, an investment strategy analyst at Baird.
Labor force participation has remained flat since June 2020, when it had averaged about 61.4%, and is now at about 61.7%.
“I think one of the main factors that could contribute to higher or elevated wage growth going forward is just tighter supply in the labor market,” Mayfield said via NBC News. “If there are functionally fewer workers, those that remain are in a better position to negotiate wage hikes.”
“Inside manufacturing, companies are 100 percent seeing the need and reacting to the need to raise wages at all levels,” said Ethan Karp, president and CEO of the Manufacturing Advocacy and Growth Network. “They still can't find people no matter what they do.”