Employers add a dismal 194,000 jobs in September, unemployment rate at 4.8%

Hiring fell far below economists' expectations last month.

October 8, 2021, 1:46 PM

Hiring in the U.S. fell far below expectations last month, with employers adding just 194,000 jobs versus the expected 500,000, as the delta variant slows the pace of the recovery.

The unemployment rate dipped slightly to 4.8%, the Department of Labor said Friday, but the latest hiring data comes after dismal job growth seen in August as well. Some 366,000 jobs were added in August, according to revised data released on Friday, and over a million jobs were added in July.

The more-contagious delta variant's impact on the recovery is likely reflected in the disappointing figures, as the labor market still finds itself at the mercy of the virus that saw new spikes earlier in the month when the employment data was collected. The unemployment rate still remains elevated compared to the pre-pandemic 3.5% seen in February 2020.

President Joe Biden delivers remarks on the economy and the Labor Department's September jobs report in the Eisenhower Executive Office Building's South Court Auditorium at the White House in Washington, Oct. 8, 2021.
Evelyn Hockstein/Reuters

President Joe Biden touted the slight unemployment rate dip in remarks Friday after the report's release, calling it "a significant improvement from when I took office and a sign that our recovery is moving forward, even in the face of a COVID pandemic." The unemployment rate was 6.3% in January 2021 when Biden took office.

While Biden acknowledged he'd like to see "faster" job growth after two months of slower-than-expected gains, he lauded the "real progress" being made in the labor market.

"We're making consistent, steady progress," the president said. "And thanks to bipartisan agreements, we're making progress on funding the government and raising the debt limit, so people continue to get their social security checks, the military continues to get paid, and so much more."

Finally, the president seized the opportunity to defend his spending record and pitch his sweeping "Build Back Better" agenda, saying, "We risk losing our edge as a nation if we don't move our infrastructure."

"We have to regain the momentum we lost," the president said.

Notable job gains last month occurred in the hard-hit leisure and hospitality industry, which added some 74,000 jobs. Employment in leisure and hospitality is still down by some 1.6 million jobs, or 9.4%, compared to data before the COVID-19 shock.

Job growth in September was also seen in professional and business services (where hiring rose by some 60,000), retail trade (which saw an increase of 56,000 jobs), and transportation and warehousing (which gained 47,000 jobs).

Some labor economists say that despite the disappointing top line numbers in the latest employment report, there is still reason to have optimism about the labor market going forward.

"Despite the weak growth in September, today's report is a glimpse in the rearview mirror," Daniel Zhao, a senior economist at hiring site Glassdoor, said in a commentary shared with ABC News on Friday. "With the Delta variant wave receding, the worst of the Delta wave may be behind us."

Meanwhile, disparities in the pandemic's impact is still reflected in the latest Labor Department data. The unemployment rate for white workers was 4.2% last month compared to 7.9% for Black workers and 6.3% for Hispanic workers.

A Panda Express restaurant displays a "Now Hiring" sign in Tampa, Florida, June 1, 2021.
Octavio Jones/Reuters, FILE

Zhao also noted that the latest report from the Labor Market is the first to reflect the expiration of federal enhanced unemployment benefits, yet the unemployment rate fell only slightly to 4.8%.

"The decelerating jobs growth in September is likely to disappoint employers and policymakers that hoped the expiration of enhanced UI benefits would push Americans back into the labor force," he said. "Ultimately, the September report will not be the final word in the debate over the impact of UI benefits."

"As we head into the fall, the resumption of school reopenings and expiration of UI benefits may push some workers back into the labor force, but red-hot labor demand is likely to keep labor shortages top of mind for employers," Zhao added.

A "Now Hiring" sign hangs on the front wall of a Harbor Freight Tools store in Manchester, N.H., Dec. 10, 2020.
Charles Krupa/AP, FILE

The demand for labor is reflected in part in the rise in wages seen in recent months. In September, hourly earnings for all employees rose by 19 cents to some $30.85, and average hourly earnings for production and nonsupervisory employees rose by 14 cents to $26.15.

Meanwhile, approximately 13.2% of workers teleworked last month due to the pandemic, the DOL said, reflecting a trend that economists predict is likely here to stay even when the virus threat recedes.

ABC News' Libby Cathey contributed to this report.

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