By Jeffry Bartash, MarketWatch
The numbers: The U.S. created 661,000 new jobs in September and the unemployment rate fell again to 7.9% to the lowest level of the pandemic, but the gain in hiring was the smallest since the economy reopened and pointed to deceleration in the recovery.
The increase in employment last month fell short of Wall Street’s estimate. Economists polled by MarketWatch had forecast an 800,000 gain.
U.S. stocks fell in Friday trading after the smaller-than-expected increase in employment and news that President Trump tested positive for the coronavirus.
Private-sector hiring was somewhat stronger with the creation of 877,000 new jobs, the Bureau of Labor Statistics said Friday. What dragged down employment in September was a decline in public-educations jobs at local schools and state colleges. Most have adopted forms of online learning.
The unemployment rate, meanwhile, fell for the fifth month in row to 7.9% from 8.4%, a new pandemic low. The official jobless rate had peaked at 14.7% in April before subsiding.
Yet the decline mostly reflected 700,000 people exiting the labor force because of a scarcity of new jobs. They aren’t counted in the unemployment rate.
Another caveat: The jobless rate would have been closer to 8.3% if households gave an accurate description of their employment status, the Bureau of Labor Statistics said. Some survey respondents have mistakenly referred to themselves as employed even though they aren’t actually working, a problem that’s bedeviled the BLS amid widespread furloughs.
What happened: Bars and restaurants added 200,000 jobs in September to lead the way. Although they’ve hired back 3.8 million people since the economy reopened, some 2.3 million industry employees are still out of work.
Retailers, for their part, increased payrolls by 142,000. Professional businesses hired 89,000 people. And manufacturers increased employment by 66,000, recovering more than half of the jobs lost early in the pandemic.
The only drop in employment took place in government, largely in education. State and local governments need fewer bus drivers, cafeteria workers and teacher aides with so many schools opting for online learning.
Temporary federal employment for the U.S. Census that’s conducted every 10 years also declined.