Friday, October 8, 2021: September’s Employment Situation – Another Disappointing Jobs Creation Month and More Americans Dropping Out to Expand the Long-Term Unemployed List
The U.S. Bureau of Labor Statistics reported that nonfarm payroll employment rose by 194,000 jobs in September. Economists had estimated 500,000 or more. Although the August numbers have adjusted up, the significant downfall from July is still trending (see 2nd table below).
These data report bad news now showing a rapidly slowing U.S. economy which has already forced economists to dramatically revise downward real Gross Domestic Product (“GDP”) growth for the U.S. in 2021 from 6.7% to 5.2%. Economists attribute the slowing economy to two main drivers: (1) supply chain problems causing many manufacturers to lay-off employees for want of parts to complete their manufacturing assemblies, and (2) a new development not previously seen in the U.S. with millions of employees simply either walking off the job in recent months to stop working, or sitting at home unemployed and not responding to the millions of available help-wanted ads frustrated employers are publishing each month in greater numbers. (DE’s daily jobs listings now exceed the number of available jobs DE used to list before the pandemic. While some of this is due to the continuing growth in the number of companies which are DE Members, adjusting for that growth still shows more available jobs today than before March 2020).
Apart from the relatively paltry number of new jobs created in September, the drop of the unemployment percentage from 5.2% to 4.8% is counterintuitively also bad news. This is because for the unemployment percentage to drop while the number of persons unemployed is growing, it means that more persons are falling off the unemployment rolls as they roll-over to a category the Bureau of Labor Statistics calls “Long Term Unemployed” (“LTU”).
LTUs are those workers who have been unemployed for a year or longer and have given up looking for work. It’s about the numbers and how one counts. Once an unemployed person exhausts his/her state unemployment benefits (usually after 13 weeks, or after 26 weeks in cases of an economic “emergency” as we are currently experiencing—although several states provide shorter coverages and a few provide longer coverages) and quits looking for work, they “fall off” the unemployment rolls, even while still remaining unemployed because the state workforce agencies no longer have a way to track their progress and know if they have remained unemployed or have perhaps become re-employed. So, the Long-Term Unemployed percentages are increasing as the LTUs lose benefits, fall off the unemployment rolls and lose contact with the state employment offices. The LTUs are unemployed but you cannot see them or count them.
Job increases occurred in leisure and hospitality, professional and business services, retail trade, and transportation and warehousing.
Job decreases occurred in public education.
Nonfarm Payroll Employment “New Jobs Added”
Monthly revisions result from additional reports from businesses and government agencies since the last published estimates and the recalculation of seasonal factors.
Month |
Original Report |
Adjusted |
September 2021 |
194,000 |
TBD |
August 2021 |
235,000 |
366,000 |
July 2021 |
943,000 |
1,091,000 |
Quote from U.S. Secretary of Labor, Marty Walsh.