Key Takeaways:
- Private sector gains of 317,000 were tempered by losses of 123,000 for government positions;
- The percentage of working-age population who are employed or seeking employment slipped to 61.6% — 1.8 percentage points below January 2020;
- Construction industry jobs rose by a relatively modest 22,000 for the month.
By Manuel Gutierrez, Consulting Economist to NKBA
Last month’s employment report was disappointing on many fronts. Total employment increased by just 194,000 jobs; the lowest number added in the last 10 months. (Figure 1).
In fact, except for last December, when employment shrank by 306,000, the number of jobs added in September was the lowest since May 2020.
Many theories have been offered to explain the poor jobs report, with the Delta variant of COVID-19 among the top. Business’ inability to fill millions of vacant positions remains a big concern, and to some degree may still be tied to the government subsidies provided to those who were unemployed.
The percentage of the working-age population who are either employed or actively looking for work deteriorated further in September to 61.6%, down 0.1% from August. As more people opt to leave their jobs, the work-force participation rate is 1.8 percentage points below its January 2020 level.
The decline appears across virtually all age and racial groups. The only exception among races is for Asians, who bucked the trend with their participation rate rising to 64.3% in September, putting it well above the national average.
September’s jobs report showed that private businesses fared much better than the government. The private sector added 317,000 jobs last month, while the government reduced employment by 123,000, resulting in the net gain of 194,000 jobs.
Job creation remains a serious concern as the 194,000 positions added in September is the smallest gain in 10 months.
Most businesses and industries within the private sector added employees last month (Figure 2). Leading all was Professional & Business Services, which added 60,000 jobs in September. This sector has been consistent, adding jobs in each of the last five months.
Retail was next, increasing employment rolls by 56,000, the first time employment has grown in this sector in the past three months.
Employment in the Health Care sector, a crucial area during these times, fell by 18,000 jobs. Total health care employment is currently 3.2% below its level from the beginning of last year. This could fall even further, as some health-care employees resist vaccine mandates, even at the cost of their jobs.
Closer to the K&B industry, Figure 2 shows that construction jobs rose by 22,000 last month, although the total number of construction positions has risen by a modest 47,000 since the beginning of the year.
Each of the four major components of construction employment, for which there is data through September, rose during the month.
Figure 3 shows that Residential construction has increased virtually every month over the 12 months. The only exceptions were April, when employment shrank by 2,600 jobs, and August, when it fell by a negligible 200 jobs.
Nonresidential construction jobs, which have declined in five of the last 12 months, jumped by a surprisingly strong 4,100 jobs. This is the largest gain since October 2020 (Figure 3).
The Specialty Trades segment added 12,600 jobs in September, capping four consecutive months of gains. However, this sector includes workers involved not only in residential and nonresidential building construction covered in Figure 3, but also in non-building sectors, such as infrastructure construction involving roads and bridges.
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