Employment growth in September fell well below consensus estimates with the addition of 194,000 jobs as reported in today’s U.S. Bureau of Labor Statistics (BLS) survey. Job growth, while moderate overall, was positive across most of the key industries measured by the BLS with notable growth in leisure and hospitality and in professional and business services. The unemployment rate declined by 0.4 percentage point to 4.8 percent.
The percent of nonfarm workers reporting that they teleworked at some point in the past four weeks because of the pandemic was 13.2 percent, little changed from the prior three months. This might indicate a new level of “normal” for work-from-home rates.
“Each month talent advisors in our global MRINetwork of 300 search firms look to the BLS analysis for insights into current hiring demand data for skilled executive, professional, technical, and managerial workers. Once again, this month, though not as robust, the demand for talent remains with the arrow pointed north,” said Bert Miller, President and CEO of MRI. “We consult every client to not just react to today’s demand for transformative talent but to look further downrange to ensure they not only understand ‘why’ they are doing well today but to understand ‘how’ they must change their organization over time to ensure healthy sustainability. We ask them to go beyond thinking their business is healthy since there is wind behind their sails and their industry is growing as well. We caution that the cumulative effects of standing still with a status quo viewpoint will at some point, potentially have a negative impact. The message is simple, do not sit still — move forward — innovate or you could be moving backwards. High water hides submerged obstacles. It is essential to have the right talent on your team who recognize where the business is headed and can drive the often-small cumulative changes that will separate their firm from the pack over a sustained period time.”
Wall Street Journal reporter Josh Mitchell summarized the overall jobs report succinctly, “The figures add to evidence that fears about the virus and global supply constraints continue to hold back the economic recovery. The biggest factor behind last month’s weak payroll gain was a decline in public-sector jobs, mainly at schools. Employment in private-sector industries rose by 317,000 in September, with modest gains across several industries. The spread this summer of the Delta variant, a particularly contagious strain of COVID-19, likely spooked would-be job seekers and impeded speedier job growth in September, despite many companies being desperate to hire, economists and business leaders say.”
Adding context to today’s BLS data, Seema Shah, chief strategist at Principal Global Investors noted, “After looking like almost a done deal, today’s jobs number has thrown expectations for (Federal Reserve) tapering into disarray. The Fed doesn’t seem to need much to convince it that tapering should begin imminently, but at just 194,000, jobs numbers are suggesting that the labor market is further from hitting the substantial progress goal than they expected.”
Employment in leisure and hospitality increased by 74,000 in September, with continued job growth in arts, entertainment, and recreation (+43,000). Employment in food services and drinking places changed little for the second consecutive month.
Professional and business services added 60,000 jobs in September. Employment continued to increase in architectural and engineering services (+15,000), management and technical consulting services (+15,000), and computer systems design and related services (+9,000).
In September, employment in retail trade rose by 56,000, following 2 months of little change. Over the month, employment gains occurred in clothing and clothing accessories stores (+27,000), general merchandise stores (+16,000), and building material and garden supply stores (+16,000). These gains were partially offset by a loss in food and beverage stores (-12,000).
Moderate growth was seen across a number of sectors. In September, employment in the information industry increased by 32,000, employment in manufacturing increased by 26,000, construction employment rose by 22,000, and wholesale trade jobs increased by 17,000.
In September, employment decreased by 144,000 in local government education and by 17,000 in state government education. Employment changed little in private education (-19,000).
“In our most recently reported month, August 2021, our same-office billings increased almost 70% versus the prior-year period. Additionally, on a year-to-date basis every industry practice has grown significantly versus the same period in 2020 with practices groups like Financial, Healthcare, and Professional Services exceeding 60% growth rates. Our consultants are also looking beyond legacy ‘analog’ talent solutions. Work from anywhere arrangements, or contract placements, now represent a significant factor in our portfolio services as our clients increasingly turning to interim work arrangements to source critical talent,” said Miller.