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August jobs report reveals payroll gains miss, but still a few positive signs to consider
The Bureau of Labor Statistics issued the September jobs report last Friday, which revealed that for the first time in 2021, payroll gains failed to hit the 200,000 mark. The report also showed that non-farm payrolls increased by 194,000 in September, as August’s number was revised up to a gain of 366,000 jobs. NAFCU Chief Economist and Vice President of Research Long analyzed the report in a new NAFCU Macro Data Flash report.
“Payroll gains disappointed in September, failing to hit the 200,000 mark for the first time in the calendar year,” said Long. “Labor force participation remains stuck almost two percentage points below pre-pandemic levels while total payrolls are down 5 million jobs since then.”
According to the report, the unemployment rate dropped to 4.8 percent in September, while labor force participation also continued to drop to 61.6 percent, still down significantly from 63.3 percent in February of last year.
“However, there were positive signs buried below the headline number. The household survey showed stronger gains than the establishment survey, which led to a drop in the unemployment rate,” noted Long. “Much of the weakness in the establishment survey was concentrated in local education, which is likely due to faulty seasonal adjustments. Meanwhile, restaurant and retail employment picked up at a time when COVID cases were cresting, which bodes well for the October report.”
Results among the major industries were mixed. Leading industries included leisure and hospitality gains 74,000 jobs, followed by 60,000 in the professional and business services. The retail trade industry also saw a gain of 56,000 jobs, while government jobs fell by 123,000.
“As compared to August, job gains in September were skewed toward full-time work, and average hours worked per employee picked up. Revisions to July and August numbers also brought up the average job gains per month over the last three months to 550,000,” remarked Long.
The report also revealed a 19-cent rise in average hourly earnings in September, with a year-over-year growth of 4.6 percent. “Wage growth accelerated to 4.6 percent versus the prior year, which should help blunt the impact of strong inflation,” stated Long.
“NAFCU expects job gains to accelerate in October and for the Federal Reserve to remain on course to taper asset purchases at its November meeting,” concluded Long.
For more up-to-date economic updates from NAFCU's award-winning research team, view NAFCU's Macro Data Flash reports.