September jobs report: Only 194,000 jobs added vs. 500,000 estimate

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CNBC’s Steve Liesman breaks down September’s dismal jobs report, which indicated that the U.S. economy created jobs at a much slower pace than expected. For access to live and exclusive video from CNBC subscribe to CNBC PRO:

The U.S. economy created jobs at a much slower-than-expected pace in September, a pessimistic sign about the state of the economy though the total was held back substantially by a sharp drop in government employment.

Nonfarm payrolls rose by just 194,000 in the month, compared with the Dow Jones estimate of 500,000, the Labor Department reported Friday. The unemployment rate fell to 4.8%, better than the expectation for 5.1% and the lowest since February 2020.

The headline number was hurt by a 123,000 decline in government payrolls, while private payrolls increased by 317,000.

The drop in the jobless rate came as the labor force participation rate edged lower, meaning more people who were sidelined during the coronavirus pandemic have returned to the workforce. A more encompassing number that also includes so-called discouraged workers and those holding part-time jobs for economic reasons declined to 8.5%, also a pandemic-era low.

“This is quite a deflating report,” said Nick Bunker, economic research director at job placement site Indeed. “This year has been one of false dawns for the labor market. Demand for workers is strong and millions of people want to return to work, but employment growth has yet to find its footing.”

Nevertheless, markets reacted little to the news, with Dow futures around flat for the morning and government bond yields mixed as investors digested what was a mixed bag of a report.

Despite the weak jobs total, wages increased sharply. The monthly gain of 0.6% pushed the year-over-year rise to 4.6% as companies use wage increases to combat the persistent labor shortage. The available workforce declined by 183,000 in September and is 3.1 million shy of where it was in February 2020, just before the pandemic was declared.

“Labor shortages are continuing to put severe upward pressure on wages … at a time when the return of low-wage leisure and hospitality workers should be depressing the average,” wrote Andrew Hunter, senior U.S. economist at Capital Economics.

Leisure and hospitality again led job creation, adding 74,000 positions, as the unemployment rate for the sector plunged to 7.7% from 9.1%. Professional and business services contributed 60,000 while retail increased by 56,000.

Job gains were spread across a variety of other sectors: Transportation and warehousing (47,000), information (32,000), social assistance (30,000), manufacturing (26,000), construction (22,000) and wholesale trade (17,000).

Local government education jobs fell by 144,000, which may have been due to seasonal adjustments in the numbers, according to Gus Faucher, chief economist at PNC.

The survey week of Sept. 12 came just as Covid cases were peaking in the U.S. The delta variant spread since has cooled, with cases most recently dropping below an average of 100,000 a day.

Unemployment for Blacks fell to 7.9% from 8.8%, due largely to a drop to 66% from 66.7% in the labor force participation rate for males.

There was some good news in Friday’s report from previous months.

July’s already-strong gains were revised higher by 38,000 to 1.0913 million, while August’s big letdown also was revised up, to 366,000 from the initially reported 235,000.

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Responses (44)

  1. "Lying Flat" is best policy since no regular job wage can outpace public employee's pensions or government taxes. Better to be on the receiving end of government funds first.

  2. Biden is bringing America back! Biden 2024

  3. The unemployment rate is more like 40-50% there was already 15-20% minimum unemployment and lazy bums not trying. 25-30% of Americans like me will not get that dangerous so called "vaccine" This is the main reason for unemployment and why the supply chain, hospitals, schools etc.. are record short staffed to the point of collapse.

  4. for recovery to happen the us needs to post more than 1 millions jobs a month for at least 5 months in a single row. but that won't happen you had competent people up in there (the trump administration) then you got them out and installed incompetent people (the biden administration). now the world will go to hell.

  5. Love how the Democrats always think they know better. They control office and everything they touch fails.

  6. Job sites are making more money signing you up and selling your information ! They're not even trying to put most people in jobs! I've received emails that say I'm a candidate for a position, but when I try to apply the position is closed! And this after signing up!

  7. What does go Brandon mean? Who's Brandon? Lol

  8. Success is not final; failure is not fatal: it is the courage to continue that counts."

  9. 😂😂😂 CNBC reality check right there!

  10. How the hell is anybody shocked by this. What did they expect from a guy who accomplished NOTHING in 45+ years as a career politician. Biden is a leader? It would be cheaper to pay him to just go back to his basement and eat ice cream. Oh wait, nevermind.

  11. Picky employers, that's part of the problem.

  12. jawbs at the mary juana fact or why?

  13. wow see Brandon run off stage ask them about numbers, this dumb, dumb and dumber. They wanted him they got him! Give me a break, see futures way down shorting this market with everything.

  14. Declines in nursing.. cause they were fired for serving throughout the pandemic without a vaccine and not wanting one after all the natural immunities they gained from the patients!

  15. Mr potato head is doing well

  16. Hard to believe that CNBC published this with an open comment section 😳

  17. Ariba!!!!!! Brandon

  18. Oooo bet this killed u lot

  19. Build Back Badder!! Lol

  20. “We’re doomed” – C3PO

  21. Bet those vaccines mandates are working are greatly !

  22. 98,000 next month.
    77,000 the month after.
    Until your Ponzi stock market crashes.

  23. Do you think the loss in government jobs is related to mandated vaccines?

  24. Time for joe to take another vacation lol 😂

  25. Weaker than expected doesn't mean bad. We added 194k, unemployment is under 5%. Why work in pre-pandemic jobs where you're on-site (and there are lots of them) when you can afford to be picky and take a telework job. The jobs are there but the remaining workforce is holding out for better.

  26. Let's go Brandon!

  27. The cut stimulus nothing, they cut unemployment nothing, they taunted and shamed…nothing…this is structural.

  28. See, you f’n Biden supporters! YOURE VERY OWN news networks are having a BRUTAL time trying to CONTINUE to run cover for this POS Administration.

    Let’s Go Brandon!!👏🏻👏🏻👏🏻👏🏻👏🏻

  29. Supervisors and managers are actually having to work. LOL ,At least where I'm employed.

  30. This daily train wreck 💥🚂 brought to you my “the most popular president of all time”, Brandon!

  31. I'm not gonna wash your dishes! I'm not gonna fry your burgers anymore!

  32. 🤣😂🤣😅 you are the 38% that approve of DOOMKOFF POLICY ‼️
    Your PATHETIC BUMBLING STOOGE DOOMKOFF HAS JUST ANOTHER FAILURE ‼️

  33. Biden is a man-made disaster for America. Let's go Brandon!

  34. o well….maybe this short movie is relevant in this matter ; https://www.youtube.com/watch?v=WLsdiMtlGXg

  35. Wow, that is bad. Lol, the party is just starting.

  36. What do you all mean by Brandon ?

  37. Agenda21, it’s all by design

  38. The unemployment rate is always much higher than reported. Always.

  39. How's that working for you Steve?

  40. Vote blue no matter who. 🤣

  41. ✂️CUT THE DISCRIMINATORY CHILD TAX CREDIT✂️
    ✋🙇🏻‍♀️🙇🏻I FIND IT PREJUDICE NOT PROGRESSIVE TO GIVE 50 MILLION NEGLIGENT "FAMILIES" FREE MONTHLY CHECKS, WHILE DOING NOTHING MONTHLY DIRECTLY FOR ADULT TAXPAYERS WHO CHOOSE CORRECTLY NOT TO HAVE CHILDREN IN POVERTY.
    🙇🏿‍♀️🙇🏿‍♂️💸🇺🇲
    270 MILLION TAXPAYERS NEED A MONTHLY TAX CREDIT FOR "POVERTY" FOR ALL.

    ❌BLOCK THE CORPORATE BILL
    ❌BLOCK PELOSI'S AGENDA BILL

  42. Just print more money that will fix everything.

  43. This Brandon guy is the future. What kind of future? Well…..