Monday, October 11, 2021

Why Weak Jobs Report?

 Popular Economics Weekly

Is hiring cooling off with the cooler weather? We really don’t know, in spite of the punk employment number. Economists don’t agree on why employers added just 194,000 jobs in September, according to the Labor Department’s unemployment report. There is too much mystery in the jobs number.

The NY times’ Ben Casselman posits, “The pandemic’s resurgence delayed office reopenings, disrupted the start of the school year and made some people reluctant to accept jobs requiring face-to-face interaction. At the same time, preliminary evidence suggests that the cutoff in unemployment benefits has done little to push people back to work.”

Also, figures are seasonally adjusted, which means that although government payrolls shrank by -123,000 jobs on an unadjusted basis, mostly in education, federal, state and local government employment actually grew by close to 900,000 workers in September. Because that’s fewer than in a typical September, the seasonal adjustment formula interprets it as a loss in jobs.

Schools are just now re-opening and not yet hiring enough teachers and staff; which has kept more mothers at home; and the Delta variant has cut back on leisure and hospitality services.

And Most people (7 in 8) who lost federal aid in June were not reemployed by early August, according to a paper authored by researchers at Columbia University, Harvard University, the University of Massachusetts Amherst and the University of Toronto last month, cited by CNN.

Census surveys show the number of people who aren't working because they have kids at home has dropped from nearly 8 million in midsummer to about 5 million today.

That's far below the hiring rate earlier in the summer when employers were adding around a million jobs a month, says NPR. And their graph shows we are still five million jobs below the job level at the start of the pandemic in February 2020.

The endurance of the pandemic is still the elephant in the room. A full recovery depends on it being vanquished. The U.S. has been slow to institute vaccine mandates, whereas Canadian federal employees will be required to declare their full vaccination status through an online portal by Oct. 29.

"These travel measures, along with mandatory vaccination for federal employees, are some of the strongest in the world," Canadian Prime Minister Trudeau told reporters recently. "If you've done the right thing and gotten vaccinated, you deserve the freedom to be safe from COVID."

And Canada is back to pre-pandemic employment levels in September, writes David Rosenberg of Rosenberg Research, because 90 percent of eligible Canadians have at least one shot and 82 percent are fully vaccinated.

The CDC reports the current 7-day moving average of daily new cases (95,448) decreased 11.6 percent compared with the previous 7-day moving average (107,953). A total of 43,997,504 COVID-19 cases have been reported as of October 6, 2021.

The bottom line is that a full jobs recovery and success of President Biden’s Build Back Better agenda now hinge on a full recovery from COVID-19.


Harlan Green © 2021

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