Will the September jobs report reflect a letup in the Delta variant?
Economic data on Friday is expected to show that job growth picked up in September but remained suppressed by the latest coronavirus wave, which …
Economic data on Friday is expected to show that job growth picked up in September but remained suppressed by the latest coronavirus wave, which led Americans to avoid restaurants and travel and made some reluctant to rejoin the work force.
Economists surveyed by FactSet expect the report, released by the Labor Department, to show that employers added nearly 500,000 jobs in September. That would be double the 235,000 jobs added in August, but far below the more than one million added in July, before the more contagious Delta variant led to a spike in coronavirus cases across much of the country.
Economists expect the unemployment rate to fall to 5.1 percent, the lowest since the pandemic began. But that drop doesn’t reflect millions of people who have left the labor force and so far have been reluctant or unable to return to work.
The data being released on Friday was collected in mid-September, when the Delta wave was near its peak. Since then, cases and hospitalizations have fallen in much of the country, and more timely data from private-sector sources suggests that economic activity has begun to rebound. If those trends continue, job growth could approach its pre-Delta pace later this fall.
“This report is a glance in the rearview mirror,” said Daniel Zhao, an economist at the career site Glassdoor. “There should be some optimism that there should be a reacceleration in October.”
Nonetheless, the recent slowdown shows the economy’s continued vulnerability to the pandemic, and the challenges that will remain even once it is over. There are still millions fewer people on U.S. payrolls than in February 2020, and millions of people have been out of work for six months or more, the standard threshold for long-term unemployment. Yet the number of job openings is at a record high, and many employers report having a hard time filling positions.
Earlier this year, many economists and policymakers hoped that September would be the month when that logjam began to abate, as schools and offices reopened and expanded unemployment benefits ended. That easing hasn’t happened. The resurgence of the pandemic delayed office reopenings and disrupted the start of the school year, and made some people reluctant to accept jobs requiring face-to-face interaction. At the same time, preliminary evidence suggests that the cutoff in unemployment benefits has done little to push people back to work.
“I am a little bit puzzled to be honest,” said Aneta Markowska, chief financial economist for the investment bank Jefferies. “We all waited for September for this big flurry of hiring on the premise that unemployment benefits and school reopening would bring people back to the labor force. And it just doesn’t seem like we’re seeing that.”