US payrolls add 661,000 jobs; unemployment rate falls to 7.9%
Friday, October 02, 2020
American employers created 661,000 nonfarm jobs in September after hiring 1.4 million workers in August, according to the federal Bureau of Labor Statistics. September’s jobless rate dropped to 7.9% from 8.4% in August.
The jobs numbers reflect in part the easing of social restrictions and reopening of businesses to stem the spread of COVID-19. However, government employment, mainly in public education at the state and local levels, dropped in September from August.
The number of unemployed workers fell to 12.6 million in September from 13.6 million in August. Adult men and women, whites and Asians experienced declines in joblessness in September versus August, according to the BLS. Teen, Black and Hispanic workers’ unemployment rates hardly changed in September versus August.
The number of workers on temporary layoff fell 1.5 million in September from August’s total, according to the BLS. The number of long-term unemployed (out of paid work 27 weeks or longer) rose 781,000 to 2.4 million in September. The expiration of enhanced pandemic unemployment benefits in late July is a negative for the long-term unemployed that weakens their buying power for goods and services from employers.
The BLS jobs report does not include the recent layoffs of tens of thousands of workers in the airline and entertainment industries. Rather, the BLS measures the labor market numbers from mid-September.
Wage-income was static. The average hourly earnings of all nonfarm workers was $29.47 in September from $29.45 in August, according to the BLS. The average workweek for all employees on private nonfarm payrolls in September was 34.7 hours versus 34.6 in August.
In September, large employers of 500 workers or more hired 297,000 workers versus 298,000 employees in August, according to ADP/Moody’s monthly jobs report for nonfarm private-sector payrolls only. Midsize firms of 50-499 workers hired 259,000 employees in September compared with August’s 79,000. Small firms of 1-49 workers hired 192,000 employees versus 52,000 in August.
ADP found that manufacturers created 130,000 jobs in September compared with 9,000 in August. Leisure and hospitality added 92,000 jobs, down from 129,000 in August.
The service sector, the economy’s dominant employer, added 552,000 new hires in September versus 389,000 in August. Goods-making companies added 196,000 jobs in September compared with 40,000 in August. Franchise businesses created 20,700 jobs, down from 21,500 in August.
“The labor market continues to recover gradually,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, in a statement. “In September, the majority of sectors and company sizes experienced gains with trade, transportation and utilities; and manufacturing leading the way. However, small businesses continued to demonstrate slower growth.”
In Washington, D.C., the Senate has yet to provide a new package of pandemic aid for the labor force. One of the consequences is labor’s weakened consumer demand.
Meanwhile, a pandemic-caused fall in state and local government tax revenue will worsen that trend and lead to slower job growth. One takeaway is that a full recovery of the labor market is years away, according to Elise Gould, a senior economist at the Economic Policy Institute in the nation’s capital.
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