Don’t let the headline numbers fool you. This report is bad. The economy may have added jobs, but at a pace way too slow considering how many jobs were lost earlier this year. The unemployment rate may have dropped, but the share of people with a job only moved up slightly. This report is an illusion of progress at a time when we needed accelerating gains in the labor market.
The number of jobs added this month is just not enough. It’s a clear deceleration from previous months in the face of a still massive jobs deficit. Payrolls in September compared to its pre-recession levels are still lower than the worst depths of the Great Recession. A large chunk of the gains came from leisure and hospitality, which is a positive development. Unfortunately, durability of those gains as we head into the fall and winter is uncertain.
The unemployment rate fell for the wrong reasons. Labor force participation ticked down, with the rate for prime-age women, ages 25-54, noticeably dropping for three straight months. The prime-age employment rate went down, which means the share of people with a job is not as high as the unemployment rate would have you believe. The rate of people moving into employment ticked down as well. The ranks of the permanent unemployed rose again, as unemployment is becoming more long-lasting.
This report is massively concerning. We are not where we need to be, nor are we moving fast enough in the right direction as we head into fall.
