US Labor Market Data: Decelerated Recovery – DWS Column

The number of new jobs created in the US in September was clearly disappointing. The statisticians counted only 661,000 new jobs – just under half as many as in the previous month. The public sector, which was strongly represented in the previous month, particularly weakened in September: this area even lost around 216,000 jobs. In contrast, the private sector surprised positively with 877,000 new jobs. However, growth here was also significantly lower than in the previous month. Only companies in the entertainment, hospitality and manufacturing sectors showed clearly positive momentum in terms of growth. The unemployment rate, on the other hand, surprisingly fell from 8.4 percent to 7.9 percent, partly because fewer people were available for employment. This reduced the participation rate to 61.4 percent. Indeed, the increase in employed people slowed significantly: a separate survey-based report showed an increase in employment of just 275,000 – the average for the previous months since April was 3.5 million. Another measurement error was also reported – the actual unemployment rate could be 0.4 percentage points higher than published, according to the responsible statistical office.

The term “mediocre” best characterizes the latest labor market report: while new jobs continue to be created in the economy, the pace of growth is slowing noticeably. However, we had already expected this development. We expect a similar dynamic in the coming months. Reports that small businesses have noticeably depleted government grants, as well as reports that large companies are increasingly shedding jobs, are bad omen. To make matters worse, the coming cold season could exacerbate the pandemic situation again.

Christian Scherrmann, USA economist

Disclaimer: The text is a column of the DWS. 4investors is not responsible for the content of the column and therefore does not necessarily have to agree with the opinion of the 4investors editorial team. Any liability and claims are therefore expressly excluded by 4investors!

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