Payam Javan: In September, private companies in the United States added fewer than 200,000 jobs, significantly undershooting market expectations and painting a picture of a labor market rebound on shaky ground.
The Labor Department’s October jobs report indicates that non-farm payroll employment increased by a meager 194,000 last month, down from the previous month’s upwardly revised 366,000 and much below FactSet’s consensus predictions of 500,000.
In an emailed response to The Epoch Times, Bankrate senior economic analyst Mark Hamrick noted, “The latest snapshot of the job market is a bit of a bad news, good news affair.”
“It delivered a surprisingly weak payrolls number,” Hamrick said, adding, “at the same time, the nation’s unemployment rate slipped four-tenths to a pandemic era low of 4.8 percent.”
“It delivered a surprisingly weak payrolls number,” Hamrick said, noting, “at the same time, the nation’s unemployment rate slipped four-tenths to a pandemic era low of 4.8 percent.”
According to the report, the total number of unemployed people declined by 710,000 to 7.7 million. While this is significantly lower than the pandemic’s peak, it is still high when compared to the 5.7 million right before the pandemic.
Only 74,000 jobs were generated in the leisure and hospitality sector, which includes bars and restaurants, which was a disappointing result. Despite the reopening of schools, there was also instability in local government education jobs, which declined by 144,000 last month.
Manufacturing, which created 27,000 jobs, and transportation and warehousing, saw an improvement by 47,000 jobs, showed relative strength.
The labor force participation rate, which measures how many individuals are working or seeking employment, stayed unchanged at 61.6 percent, a record low level. The labor force participation rate was 63.6 percent in February 2020, down from a record high of 67.3 percent in April 2000.
Hamrick noted: “Some have thought the end of pandemic employment benefits would bring a rush of potential workers back into the equation. We’re not seeing that yet,”Republicans quickly jumped on the lackluster jobs report, blaming it on the policies of the Biden administration.
Republicans on the Small Business Committee of the House of Representatives wrote on Twitter: “With only 194,000 jobs added back to our economy last month, it is clear that President Biden’s failed
economic policies are shuttering small businesses.”
The Republican National Committee stated: “Biden promised to create jobs, he promised he had a secret plan to ‘shut down the virus.’ Trump handed Biden vaccines and a recovering economy, and Biden has still failed at both.”
“Pro tip: the top ten states leading the recovery are all led by Republican governors. If Biden wants to spur growth, he should take his cues from them” the RNC noted.
Overall, red states have dominated the economic rebound, with the lowest unemployment rates in the United States in August 2021.
President Joe Biden’s job-creation record was defended by White House Chief of Staff Ron Klain on Twitter.
“The unemployment rate is now down to 4.8 percent—in just eight months. We’ve created 2x more jobs under @POTUS in his first nine months than any administration in history,” Klain wrote.
The underwhelming jobs report might postpone the Federal Reserve’s planned decision to begin reducing monetary support before the end of the year, in addition to casting doubt on the sustainability of the labor market recovery.
The labor market remains a crucial metric for the Fed, with Fed chair Jerome Powell indicating that reaching full employment was a need for the central bank to begin reducing asset purchases.
Investors are searching for patterns as to when the Fed will begin the much-anticipated rollback of its massive $120 billion in monthly Treasury and mortgage securities purchases, which was one of the emergency measures the central bank used last year to help the economy recover from the pandemic recession.