Employers continued their hiring wave in September and surprised economists with an expansion of job fillings in the catering, healthcare and public sector.
Bureau of Labor Statistics Monthly Job Openings reportStatistics published on Friday showed an augment of 336,000 jobs. The unemployment rate remained stable at 3.8%.
The BLS also revised the number of new jobs created in July and August upwards, from 157,000 to 236,000 and from 187,000 to 227,000.
In a speech Friday morning, President Joe Biden welcomed the higher-than-expected employment numbers and low unemployment rate, noting: “The unemployment rate has remained below 4% for 20 consecutive months, the longest period in 50 years.”
However, Biden also sent a message to Republicans, whom he accused of jeopardizing economic progress. averted a government shutdown over the weekend, but lawmakers must resolve the issue before Nov. 17 to keep the government funded.
“Republicans in the House should not put us back into crisis mode. We have only 40 days for Congress to get back to work … to fund the government, avoid a shutdown and protect the tremendous gains American workers have made over the last two and a half years,” Biden said.
Where the jobs are
Health care added 41,000 jobs last month, public sector employment rose by 73,000 jobs, and leisure and hospitality added 96,000 jobs, with the latter two sectors reporting higher employment numbers than the monthly average. In leisure and hospitality, employment in food service and restaurant services returned to February 2020 levels.
State governments have added 29,000 jobs in education, and local governments (excluding education) have added 27,000 jobs, which is good news considering how slowly those jobs have returned to pre-pandemic levels, economists said. Employment in state and local governments is Decrease of 0.5% compared to its pre-pandemic level, according to an analysis of BLS data by the Economic Policy Institute.
Elise Gould, senior economist at the Economic Policy Institute, said the augment in health care jobs was not surprising given the aging population and demand for health care services. Despite fears that the leisure and hospitality industry would not recover from the economic damage businesses suffered in 2020, the report found signs of a healthier sector.
“The leisure and hospitality sectors in particular have seen the largest job losses, and this is where the huge gap created in spring 2020 is steadily being filled,” Gould said.
Wages exceed inflation
Although wage growth has slowed, inflation is still falling faster. Average hourly earnings rose 7 cents in September, compared to 8 cents from July to August. Last year, wages rose 4.2%. Gould said the Fed could look at those numbers and determine that it is not an overheated labor market, which could influence its decisions to pause or raise interest rates.
“We continue to see a faster decline in inflation and then a slowdown in wage growth. So living standards are rising because people have been getting real wage increases for a number of months,” she said.
Kitty Richards, acting executive director of the Washington-based think tank Groundwork Collaborative, said the growth in government investment in various industries, such as manufacturing, has spilled over into other parts of the labor market, leading to job growth in some of those sectors.
“These types of front-line service jobs rely a lot on the strength of the overall economy, and we had really terrible wages there for many years as well,” she said. “I think that wage growth, supported overall by these investments in workers and manufacturing and the energy transition, has pushed up wages and has had a ripple effect, creating a much more attractive labor market that is drawing people into the labor market. I think the specific sectors in this month’s jobs report are more indicative of a strong economy with overall rising incomes and wages than specific investments.”
There are areas Gould is watching to see if marginalized groups of workers continue to have worse job outcomes. The unemployment rate for black workers rose from 5.3% to 5.7%. The unemployment rate for workers ages 16-24 was 8.4%, up from 8.6% in August, but the general trend Since April, when the rate was 6.5%, the unemployment rate has increased.
“I would like to see these trends reversed because the overall unemployment rate remains low over long periods of time. You would hope that would have a bigger impact on historically disadvantaged groups and we have seen that over periods of time. The unemployment rate for young workers rose last month and has been for a number of months,” she said. “… Those groups often have worse outcomes so I think it’s important to see where there might be problems. I don’t see any problems yet, but I would certainly like to see these trends reversed.”
