New jobs fell 300,000 short of Dow Jones estimate
Cole Carnick • October 8, 2021 2:05 pm
The economy created just 194,000 jobs last month, marking its worst performance since December 2020, the Labor Department reported Friday.
The latest job numbers are down from 366,000 added in August and fell more than 300,000 short of the Dow Jones estimate. While the unemployment rate fell to 4.8 percent from 5.2, the labor participation rate ticked down to 61.6 percent—compared with 63.4 percent in January 2020—indicating many Americans are leaving the workforce. While the unemployment rate for women dropped 0.6 percent, the group lost a net 26,000 jobs in September.
A loss of more than 100,000 government jobs, particularly at public schools, contributed to the modest employment figures, as many school districts face COVID-related closures. The weak employment numbers are raising alarms that the economy is struggling with significant labor shortages.
“This was the time when a lot of people were expecting labor shortages to be getting better but in fact they’re getting worse,” Michael Pearce, senior U.S. economist at Capital Economics, told the Wall Street Journal. “It’s a pretty worrying situation.”
The tight labor market is pushing up wages, which increased 0.6 percent last month. Elevated wages could worsen the country’s inflation surge, which, coupled with stagnant job growth, has prompted some analysts to warn about the return of “stagflation,” which crippled the U.S. economy in the 1970s.
“Now one can make a case that ‘mild’ stagflation is already underway,” New York University economist Nouriel Roubini wrote in an August column. “Inflation is rising in the United States and many advanced economies, and growth is slowing sharply, despite massive monetary, credit, and fiscal stimulus.”
The disappointing jobs report comes as the Biden administration prepares to enforce its vaccine mandate, which would require employees at businesses with more than 100 workers and federal agencies to receive coronavirus vaccines.
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