ARLINGTON, Va.—The September jobs report is being called “troubling,” and job growth fell below expectations and thousands of workers left the workforce, said NAFCU Chief Economist and Vice President of Research Curt Long.
Non-farm payrolls rose 661,000 during the month, and while the unemployment rate fell 0.5% percentage points to 7.9%, the labor participation rate also fell – dropping 0.3%age points to 61.4%.
"In all, the labor force shrunk by nearly 700,000 workers in September, 89% of which were female," Long said, pointing out the drop in female labor participation coincided with the start of the school year. "Meanwhile, the ranks of the unemployed continue to tilt away from temporary layoffs and toward permanent ones; the latter group swelled by 350,000 during the month.
With those additions, permanent job losers represent 2.3% of the labor force, which is just over half the peak during the Great Recession. It was not until 2017 that the figure returned to its pre-crisis level, Long said.
Results among the major industries showed modest gains in most sectors, led by services growth. Leisure and hospitality gained 61,000 jobs, as did education and health services. Professional and business services (+25,000 jobs) and construction (+16,000) also saw gains.
Dim Fourth Quarter
Average hourly earnings rose two cents in September and year-over-year growth remained at 4.7%.
"With several large employers announcing layoffs recently, it seems clear that the fourth quarter will see its fair share of job separations, while hiring rates will be too weak to absorb the influx," Long concluded. "Without another sizable spending package from Congress, continued recovery in the labor market looks doubtful, which sets up a long slog to get back to a pre-crisis economy."