Weak September jobs report due to COVID pandemic, US Labor Secretary Marty Walsh says

US labor secretary explains what led to disappointing jobs report

Labor Secretary Marty Walsh argues the dismal jobs report was due to the Delta variant, which affected economic activity and, therefore, job growth. 

Labor Secretary Marty Walsh blamed the COVID-19 pandemic on September’s disappointing jobs report, which was released on Friday, saying the Delta variant, affected economic activity and, therefore, job growth.

Speaking on "Varney & Co." on Friday shortly after the release of the September jobs report, Walsh stressed that the U.S. is "still dealing with a pandemic."

"We are still dealing with the delta variant," he continued.

He pointed to the hospitality numbers, saying about 74,000 were gained in that sector, but acknowledged that the number "was expected to be much higher" and said there are "concerns around that." 

Walsh argued the delta variant caused "less people going to restaurants."   

U.S. employers hired less workers than expected last month as supplemental unemployment benefits expired. 

JOBS REPORT WILDLY MISSES EXPECTATIONS

Nonfarm payrolls increased by 194,000 workers in September as the unemployment rate fell to 4.8%, a pandemic low, the Labor Department said Friday. Economists surveyed by Refinitiv were expecting the addition of 500,000 new jobs and the unemployment rate to slip to 5.1%. 

"We still have work to do. There is no question about it," Walsh said. 

September jobs report significantly below analyst expectations

Fox Business’ Edward Lawrence breaks down the September jobs report.

Walsh did, however, point out that the unemployment rate dropped below 5%. 

"It took us until 2016 to get to that number in the Great Recession so there are opportunities here that we have in front of us and we continue to move forward one step at a time," he said, stressing that "we are living in unprecedented times." 

He also noted that countries around the world are "dealing with the same thing" as it pertains to "concerns in the job market" given the worldwide pandemic. 

The September report was the first since the $300 per week in supplemental unemployment benefits expired on September 5. Economists are still assessing the impact of the Child Tax Credit, which pays families up to $3,600 per child per year. Also having an impact going forward will be the mandatory vaccine requirements being enforced by a growing number of companies. 

The August jobs report also produced dismal numbers as U.S. hiring slowed sharply with the resurgence in new COVID-19 infections impeding job growth. On Friday, the jobs gains in August were revised up to 366,000 from 235,000. Last month, the Labor Department said the unemployment rate fell to 5.2% in August. Analysts surveyed by Refintiv had expected the addition of 728,000 jobs and the unemployment rate to fall to 5.2%. 

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Notable job gains in September occurred in leisure and hospitality (+74,000) were led by the arts, entertainment, and recreation sector (+43,000). Hiring in food services and drinking places was little changed for a second straight month after averaging a monthly gain of 197,000 from January through July. Professional and business services (+60,000), retail trade (+56,000), and transportation and warehousing (+47,000) also saw sizable gains. 

Both local government education (-144,000) and state government education (-17,000) lost jobs last month. 

The number workers reentering the labor force decreased by 198,000 last month to 2.3 million. The labor force participation rate was little changed at 61.6%, and was 1.7 percentage points below its February 2020 level. The rate has held between 61.4% and 61.7% since June 2020.   

Average hourly earnings rose 0.6% in September and was up 4.6% year over year. Economists were expecting a 0.4% monthly increase and a 4.6% year over year gain. 

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FOX Business’ Jonathan Garber contributed to this report. 

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