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by Maurie Backman | Published on Oct. 8, 2021
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Though the jobless rate has declined, economists were unhappy at how few jobs were added.
In August, the U.S. unemployment rate fell to 5.2%. That alone was good news, as it marked the lowest level since the start of the pandemic. September's jobs report was even more positive -- last month, the national unemployment rate dropped to 4.8%, a new pandemic-era low. But unfortunately, the news isn't all positive.
While the jobless rate may have ticked downward, economists were overwhelmingly disappointed with the number of new jobs added in September. Though they anticipated 500,000 new jobs, the number came to just 194,000.
Why such a low number? Though the private sector added 317,000 new jobs, that number was offset by the 123,000 government jobs that were shed.
Not surprisingly, the hard-hit leisure and hospitality industry added the most jobs in September, creating 74,000 new positions. Within that sector, the unemployment rate declined from 9.1% to 7.7%.
While economists may have been disappointed on the job creation front, there was some positive news on wage growth. As of last month, wages were up 4.6% on a national level compared to the previous September. A big part of that stems from employer desperation. Companies are grappling with labor shortages, and many have gone out of their way to entice workers with higher wages.
Of course, annual wage growth of 4.6% may read like a positive. But when we consider that the rate of inflation is outpacing wage growth, it erodes consumers' buying power.
The last round of direct stimulus checks to hit Americans' bank accounts went out in March. And in early September, enhanced unemployment benefits ended. That meant no more of the $300 weekly boost workers in many states were collecting, and it also meant the end of pandemic-era programs that provided jobless benefits to workers not normally eligible, like the self-employed.
While the number of jobs created in September may have fallen short of expectations, overall, it's fair to say that the news is pretty positive. The national unemployment rate is not only at its lowest level since the start of the pandemic, it's also not far off from the 4.4% unemployment rate recorded in March of 2020, before the full impact of the pandemic on the economy was felt.
It's fair to say that lawmakers most likely will not dish out additional aid to the general public. Families with eligible children can still look forward to monthly Child Tax Credit payments for the rest of the year, but even that boosted aid has an expiration date. Next year, the credit could revert to its former state if lawmakers don't extend the enhanced version, which is not only more generous, but also allows recipients to get the money throughout the year instead of as a lump sum.
While a lack of incoming federal aid may read like negative news, it's actually a sign that the economy is stronger than it's been in a long time. And that's a clearly positive development.
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