Job creation slowed in September, with just 194,000 jobs added

Job growth in September undershot expectations for the second month in a row, adding to worries that the spread of the Delta variant and a tight job market are holding back the economic recovery.

Employers added 194,000 jobs last month, the Labor Department said Friday. Economists had expected about 490,000 jobs to be created. 

The nation’s unemployment rate fell to 4.8%, from 5.2%, due to more unemployed workers finding jobs as well as people leaving the labor force, meaning they are no longer counted as unemployed since they are not actively seeking work. The labor-participation rate, a measure of people working or searching for work, ticked down to 61.6% in September, from 61.7% in August.

“This is quite a deflating report,” Nick Bunker, economic research director at Indeed, said in a note. “The hope was that August was an anomaly but the fact is, the Delta variant was still with us in September. One optimistic interpretation is that COVID-19 case counts are receding, so future months should be stronger. But the reality is that we are still in a pandemic.”

Job growth has been slowing since its summer surge. Employers added more than 1 million jobs in July yet just 366,000 in August, according to revised Labor Department figures. 

Education hiring in September was lower than expected, leading to a loss of 144,000 jobs on a seasonally-adjusted basis. That loss offset a relatively robust gain of 317,000 private payrolls.

The leisure and hospitality sector added 74,000 jobs last month. Professional and business services added 60,000 jobs, while retail added 56,000.