Friday came, the 7:30 a.m. hour approached. I waited by the little TV in the kitchen, green smoothie in hand. With the enhanced COVID unemployment benefits ending on Labor Day, the September jobs report was assured to be fascinating, and as was expected by most of the pundits I was watching on CNBC, to be quite spectacular as well.
The headlines flashed, TV market reporter Steve Leishmann paused, and put his reading glasses on. There was consternation on his face, something was wrong. The experts were expecting 400,000 to 500,000 new jobs. The report said 194,000 new jobs in September. An absolutely brutal miss.
The rest of the guest’s faces on the TV were also full of stress and confusion. I needed to get on with my day; I needed to look closer at the report and try to make sense out of this data. My head was spinning.
For those who haven’t noticed, there are “help wanted” signs all over the place in Northwest Indiana. At the coffee shops, at the Amazon warehouse going up by my Crown Point office, at the gas stations, outside of the Albanese factory, on the flashing sign at Opportunity Enterprises. Where have the baristas, the warehouse and production workers, the cashiers and the caregivers gone? They were supposed to come back after Labor Day. No more $600 weekly unemployment payments, the lawsuits are over, employers and customers are waiting. What the heck is going on?
Economics has oft been called the “dismal science,” apparently attempting to build mathematical models to explain complex human behavior isn’t fun for everyone. Who knew? Perhaps now we see why, as I think we are living through a period that can best be described as frustrating for those among us who attempt to forecast our economy.
In most situations where bizarre decision-making leads to unintended consequences I like to blame the usual primary culprit, (no, not teenage children) a.k.a. the federal government. To be sure, the government does bear some blame here. In my opinion the enhanced COVID unemployment benefits went on way too long, as over time people lose skills and run the risk of getting caught in a cycle of stagnation. This combined with government announcements about employer-based vaccine mandates likely took the edge off for some potential job seekers.
While we are playing the blame game, however, COVID itself surely makes the list. Surrounding the payroll survey period of August and early September the Delta variant was making headlines as cases were surging in almost every region of the U.S. For potential workers who were wanting to wait out the pandemic at home, hitting the pause button for a couple more weeks was likely making sense.
When I did get the chance to look at some analysis of the dismal September payroll report, the news below the headline was not quite as gloomy. The headline number was heavily impacted by some technical seasonal factors related to schools going back into session, and while government hiring did dip, private sector hiring was quite strong during the survey period. In addition, the August job numbers were also revised materially higher as well.
After coming to a better understanding about some of the factors and numbers underneath the primary job creation number, I don’t think I can ever remember a “noisier” employment report, and my gut feeling is our best employment numbers remain ahead of us.
Delta has surged and retreated, the poorly thought-out vaccine mandates will play out one way or another.
While COVID may have changed the way we work in America, one thing is clear, there’s lots of work to be done and America is still hiring.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at firstname.lastname@example.org. Securities offered through LPL Financial, member FINRA/SIPC.