September’s job report was a severe disappointment, with only 194,000 nonfarm jobs added last month, less than half of expectations, and the smallest gain for the year.

The unemployment rate fell 0.4 percentage points to 4.8%, in part because of people leaving the labor force, as evidenced by the labor force participation rate dropping to 61.6%.

Although the number of unemployed fell 710,000 to 7.7 million, there were 183,000 people who left the labor force.

Highlighted Sectors

The private sector added 317,000 jobs, the smallest increase since April, and significantly below the preceding 3-, 6-, and 12-month average increases. Four out of five private jobs added in September were in the service sector.

Professional and business services made up almost a third of the total month’s increase, adding 60,000 jobs.

Construction, which added no jobs in August, added 22,000 in September.

The leisure and hospitality sector almost doubled its job gains from the previous month, adding 74,000, but still down a substantial 1.6 million jobs from February 2020.

Transportation and warehousing added 47,300 jobs.

Retail trade reversed its downward trend, adding 56,100 jobs.

Oil and gas extraction added only 1,100 jobs in September and coal mining saw no increase. While oil and gas extraction has returned to pre-pandemic levels, coal mining is still down 9% from February 2020.

Manufacturing added only 26,000 jobs last month. The sector is still 353,000 jobs lower than its February 2020 level.

Government jobs declined 123,000 in September with local government education falling 144,200—more than the total decline in the sector.

Earnings, Revisions, Miscellaneous

Average hourly earnings rose for the sixth consecutive month in September, adding 19 cents to $30.85 while the average workweek rose slightly to 34.8 hours. Nominal wages have risen less than inflation over the last year.

July nonfarm payroll was revised up 38,000 to 1,091,000 and August was revised up 131,000 to 366,000. Even with the previous two month’s combined revisions of 169,000 added to September’s 194,000, that total is still less than the expected number for September.

Prime age (25-54 years old) employment rose a mere 57,000 to 98.3 million; it remains 2.9 million below its February 2020 level.

The labor force participation rate unexpectedly fell to 61.1%, now 2.2 percentage points below February 2020.

Vaccine requirements

The household survey showed 526,000 jobs added in September. This survey has several differences from the establishment survey which showed only 194,000 jobs added. One such difference is the household survey including agricultural workers while the establishment survey does not. The household survey also counts those on unpaid leave as employed, but the establishment survey does not. The 332,000 difference could in part be explained by vaccine mandates which have caused some employees who have not received the vaccine to be placed on unpaid leave. The establishment survey also noted a large decline in government workers, specifically local government education, where vaccine mandates were likely enforced more than in the private sector last month. Neither survey provides explicit data on how many employees have quit or been fired due to vaccine mandates.

Abridged Summary

The September jobs report is objectively the worst of the year. Nonfarm employment remains 5 million below the February 2020 level. The unemployment rate and the number of unemployed declined, partly due to many people leaving the labor force, which is now 3.1 million below where it was in February 2020. If the labor force were still at its February 2020 level, the unemployment rate would be 1.8 percentage points higher at 6.6%.


Congress should reject the proposed massive bills that would substantially increase spending, taxes, and debt, which also include disincentives to working and will further hamper the labor market. Vaccine mandates, which provide a significant disincentive for some employees, should also cease.