September jobs report: US economy gains 661,000 payrolls, unemployment rate ticks down to 7.9%

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The US economy saw another 661,000 jobs added back in September and a modest improvement in the unemployment rate, as the recovery in the labor market continues at a stagnating rate.

The Labor Department released its September jobs report Friday morning. Here were the main metrics from the release, compared to consensus estimates compiled by Bloomberg.

  • Change in non-farm payrolls: +661,000 vs. +859,000 expected and +1.489 million in August

  • Unemployment rate: 7.9% vs. 8.2% expected and 8.4% in August

  • Average hourly earnings, month over month: 0.1% vs. 0.2% expected and 0.3% in August

  • Average hourly earnings, year over year: 4.7% vs. 4.8% expected and 4.6% in August

  • Labor force participation rate: 61.4% vs. 61.9% expected and 61.7% in August

The addition in non-farm payrolls marked the fifth straight month of net job gains. July’s payroll gains were upwardly revised by 27,000 to 1.761 million, and August’s were revised up by 118,000 to 1.489 million.

Still, the economy remains far from recuperating the jobs lost during the nadir of the pandemic period in March and April. Between those two months, employment fell by more than 22 million. Through September, just 11.4 million jobs were brought back.

By industry, leisure and hospitality employers brought back by far the most payrolls in September at 318,00, with nearly two-thirds of these gains coming in bars and restaurants as these businesses reopened further. Still, employment at food services and drinking places remains lower by 2.3 million compared to February – even with job growth totaling 3.8 million over the past 5 months.

Retail trade added back more than 142,000 jobs during the month, comprising a major portion of the overall job gains in September, but representing step down from the 261,000 payrolls added in these industries in August.

Government jobs were the only category to post net job losses during the month, driven by a decline in the number of temporary Census 2020 workers.

Meanwhile, the unemployment rate ticked down more than expected in September, improving further from the pandemic-era high of 14.7% in April, but still coming in at more than double the unemployment rate from February this year before the outbreak. And September’s drop in the jobless rate also coincided with an unexpected decline in the labor force participation rate, reflecting a decline in the number of Americans either employed or actively seeking employment.

The US economy regained another 661,000 non-farm payrolls in September and the unemployment rate ticked down to 7.9%. (David Foster/Yahoo Finance)
The US economy regained another 661,000 non-farm payrolls in September and the unemployment rate ticked down to 7.9%. (David Foster/Yahoo Finance)

Even as the US economy brings back some workers, an increasing number of Americans have found their layoffs to be permanent. The number of permanent job losers jumped by 345,000 to 3.8 million in September, with this number having increased by 2.5 million since February.