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The big takeaways from Biden’s jobs report bust

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Women, teachers and health care employees all suffered from the slow rebound last month.

The labor market recovery that President Joe Biden has promised slowed again in September, with a weaker-than-expected 194,000 new jobs created.

That suggests school reopenings and the end of generous federal jobless benefits haven’t brought enough Americans back into the labor force amid the resurgence of the coronavirus.

Yet the recovery has been uneven throughout the economy, with women, teachers and health care employees suffering from the slow rebound last month, according to a Labor Department report released Friday. Among the gainers in September were white and Asian workers, retail and hospitality employees, the long-term unemployed and wage earners generally.

While the overall unemployment rate fell to 4.8 percent from 5.2 percent, the drop was likely fueled by 183,000 people leaving the labor force.

Biden touted the report as another sign that his administration has delivered steady month-over-month job growth and blamed the disappointing overall number partly on the fact the survey was taken before a recent decline in Covid cases.

“Remember, today’s report is based on a survey that was taken during the week of September the 13th, not today — September 13, when COVID cases were averaging more than 150,000 per day,” the president said in remarks after the report. “Since then, we’ve seen the daily cases fall by more than one-third and they’re continuing to trend down. We’re continuing to make progress.”

Here’s a closer look at how key groups fared in September:

Women

The report showed that 309,000 women 20 years and older dropped out of the labor market in September, marking the second straight month of losses. Men in the same age group regained 182,000 jobs.

Working women have been acutely affected by the school and child care closures prompted by the pandemic, holding many back from returning to the workforce. But they were initially expected to go back to work in September, with school reopenings relieving some of the responsibilities that had been keeping them at home. But since the Delta variant of the coronavirus took hold in late summer and disrupted school plans, economists have been bracing for a devastating September for women who may have had to continue taking care of their kids amid the uncertainty. The numbers show that concern was well-founded.

Race

While other major ethnic groups have seen their unemployment rates near or below the national level throughout most of 2021, the rate among Black workers had remained near 9 percent. In September, Black unemployment fell by almost a full percentage point to 7.9 percent, narrowing the gap on the national rate of 4.8 percent. The bad news: 83,000 Black workers also left the labor force last month, probably contributing to the drop in the jobless rate.

Black workers — and women in particular — make up large shares of the workforce in health services and child care, industries that have been slower than most to recover. AFL-CIO Chief Economist Bill Spriggs has also argued that the stubbornly high unemployment rate among Black workers could be due to discrimination in hiring.

Hispanic workers have also been experiencing jobless rates above the national level, seeing 6.3 percent unemployment in September, little changed from August. White and Asian workers have been recovering more quickly, with the unemployment rate falling to 4.2 percent in September for both groups.

Retail and leisure

Consumer-facing industries including retail, leisure and hospitality were walloped in early 2020 by pandemic safety restrictions and business closures, facing the largest post-pandemic jobs deficit of any sector of the economy. They remain the first to take the hit when fears of the virus increase. But both sectors saw some improvement in September, which is a good sign for the economy as coronavirus cases start to recede. Leisure and hospitality added 74,000 jobs, while retail added 56,000.

Labor force participation

Beyond the topline number, the jobs reports suggests that fewer people were optimistic enough about the market to look for work last month.

While the national unemployment rate has been falling for months, the labor force participation rate — which captures how many people are either employed or actively looking for work — has remained pretty stagnant. That rate was 61.6 percent in September, not much different from the 61.7 percent in August. It’s also still down 1.7 percentage points from February 2020, just before the pandemic hit. That matters because the size of the workforce is tied to productivity, which is the basis for wage gains.

Many Republicans had predicted that the Sept. 6 expiration of federal unemployment benefits would increase employment as Americans could no longer afford to stay away from work. But since the jobless aid has ended for millions, many people have fallen out of the labor force instead and are no longer considered “unemployed.” While this can push the unemployment rate down — if you’re not actually looking for a job, you’re not counted as unemployed — it’s also a sign that there are fewer people actively available for work.

Wages

Average hourly earnings increased in September by 19 cents, bringing them to $30.85. That follows five months of significant hikes in wages and suggests that the widespread demand for workers as businesses have reopened has put upward pressure on pay, as employers compete for labor.

Long term unemployed

The longer people remain unemployed, the longer it typically takes them to find a job, which is why economists like to keep an eye on the number of those who have been out of a job for at least six months. That figure fell by nearly 500,000 last month, which is a good indicator of labor market health, as people with large gaps on their resumés can face more obstacles to reemployment and can find themselves in deeper financial trouble. However, there were still 1.6 million more long-term unemployed in the workforce last month than before the pandemic began.

Education

One of the puzzles in the jobs report was the loss of jobs in state and local public education in September — the month when schools were supposed to reopen. Instead, the market saw a notable decrease in jobs in this area — a drop of 161,000 workers, which dragged down the headline numbers.

Much of this, however, is likely due to seasonal adjustment. That’s because schools usually ramp up hiring in September for the start of the academic year, so the models that adjust for seasonal factors expect it. But this year, some of those hires may have taken place in July and August as students started earlier, making September hiring in public education slower than normal. But while the decline of 161,000 looks bad, it’s probably due in part to hires that did not happen last month rather than actual job losses, a key distinction.

About the author: Rebecca Rainey is an employment and immigration reporter with POLITICO Pro and the author of the Morning Shift newsletter. Prior to joining POLITICO in August 2018, Rainey covered the Occupational Safety and Health administration and regulatory reform on Capitol Hill. 

About the author: Megan Cassella is a trade reporter for POLITICO Pro. Before joining the trade team in June 2016, Megan worked for Reuters based out of Washington, covering the economy, domestic politics and the 2016 presidential campaign.

This blog originally appeared at Politico on October 8, 2021. Reprinted with permission.


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Jobs Report: Conservative Economic Illusions Are Unmasked

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Isaiah J. PooleThe surprisingly disappointing September unemployment report – 142,000 new jobs created compared to an expectation of more than 200,000 – should break once and for all two illusions about our ability to sustain a robust economy.

The first illusion is that there is no penalty for the continuing lack of public investment in the fundamentals of the real economy – from the schools that develop the skills and creativity of our future workforce to the transportation networks that enable us to move goods and people through our communities.

Years ago we should have had a place a major plan to bring all of our common assets – from schools to roads to water systems to our energy grid – into the 21st century. Not only would this have created millions of jobs, but it would have set the nation up for sustainable, more ecologically responsible, long-term growth. We should have taken advantage of the near-zero borrowing costs and the willingness of the markets – notwithstanding the sky-is-falling bleating of the chattering class – to allow the United States to take on more debt as long as it was wisely used to build for the future.

Labor Secretary Thomas Perez said in an interview on Bloomberg today that the federal spending constraints imposed by the Republican Congress – the “sequester caps” – mean the economy is producing 500,000 fewer jobs a year than it would if those constraints were lifted. Those jobs would range from construction workers to teachers to health care workers.

The second illusion is that we can continue down the road of corporate-driven so-called “free trade” – which has given us month after month of “enormous, humongous” trade deficits – and have a strong Main Street economy. Earlier this year, the White House Council of Economic Advisors issued a report that noted that during the second quarter of the year, “net exports subtracted nearly 2 full percentage points from quarterly GDP growth.” Of course it would: every month of trade deficits running between $40 billion and $50 billion represents that much less economic activity that would benefit American workers and the American economy. Plus, our strong dollar makes our exports more expensive and thus less attractive to potential foreign customers. It is no wonder, then, that this month’s jobs report reflects continued weakness in our manufacturing sector, which would be a source of good=paying jobs if it were stronger.

Federal Reserve chair Janet Yellen has warned repeatedly that there was a limit to what the Fed’s zero-interest-rate policy could accomplish without a pro-growth and pro-people fiscal policy to complement it. That was clear even with the sunnier initial summer jobs reports. Now that those reports have been revised to show that we’ve been averaging only an additional 167,000 jobs a month in this past three months – just enough to tread water – the truth of what Yellen has been saying is in even sharper relief.

How the Obama administration and Congress should respond is clear: End the senseless budget sequester caps, get a long-term transportation bill passed this month and don’t approve a Trans-Pacific Partnership trade bill that continues the pattern of chronic trade deficits and outsourced jobs. The political machinery in Washington seems almost hopelessly constipated, but we should still seize the professed shock of this month’s employment news to change the political conversation in a way that could lead to long-term change.

This blog was originally posted on Our Future on October 2, 2015. Reprinted with permission.

About the Author: Isaiah J. Poole has been the editor of OurFuture.org since 2007. Previously he worked for 25 years in mainstream media, most recently at Congressional Quarterly, where he covered congressional leadership and tracked major bills through Congress. Most of his journalism experience has been in Washington as both a reporter and an editor on topics ranging from presidential politics to pop culture. His work has put him at the front lines of ideological battles between progressives and conservatives. He also served as a founding member of the Washington Association of Black Journalists and the National Lesbian and Gay Journalists Association.


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