The United States economy added 194,000 jobs in September, slower than the pace of recovery earlier in the summer and a further slowdown from August. Accordingly, the US labor market remained 7 million jobs short of its pre-pandemic projections. The Delta variant likely hindered further progress, as cases and deaths remained high and increases in air travel and in-person dining occurred later in the month, largely after the period covered by the September employment report.
Despite the low headline job growth, there were also several positive signs of improvement. Both the official and realistic unemployment rate—adjusted to account for misclassification and the unusually large decline in the labor force participation rate—fell by 0.4 percentage points, the second-largest decline of any month of this year. The labor market also continues to behave as if it were very tight. There were around 12 million job openings and 8 million unemployed workers in September, just 0.7 workers per opening based on the official unemployment rate or 0.9 when calculated using the realistic rate.
There are still many jobs that should be relatively easy to recover given the large number of openings and continued economic growth. The last several million will be more difficult. Some people may have permanently left the labor force through early retirement, and changes in labor demand could mean some jobs never return. Time will tell.
This PIIE Chart is based on research in Jason Furman and Wilson Powell III's blog, September job growth was worse than expected but better than it looked.