Full economic impact of Delta begins to come into focus, new government data shows

The U.S. workforce shrank last month as the Delta variant surged through the nation, according to new government employment data. 

The monthly jobs report released by the Bureau of Labor Statistics showed a decrease in the total number of individuals participating in the workforce. The workforce participation rate – which measures the percentage of U.S. adults working or actively looking for work – decreased from 61.7 percent in August to 61.6 percent in September.

The national unemployment rate fell from 5.2 percent to 4.8 percent. This was largely driven by individuals exiting the workforce, however. The unemployment rate fluctuates not only as individuals find work but also as they give up looking for work. 

The surveys upon which this data is based were conducted as the Delta variant was peaking in many parts of the country. The August report, which showed a slowdown in job and labor force growth, gave an initial glimpse of Delta’s economic impact. Next month’s report will provide a glimpse into workforce trends as cases declined. Meanwhile, the September data suggests Delta may have discouraged some from working or looking for work. Non-government surveys have shown that rising COVID cases in the late Summer and early Fall was a significant concern for many workers, despite the widespread availability of vaccines and rising vaccination rates.   

“The workforce shortage persists as a major challenge for employers and among the top concerns for the business community,” said Kentucky Chamber Senior Policy Analyst Charles Aull. “Last month, another government report showed a record-setting 10.9 million job openings. Opportunity is out there, and employers are doing everything they can to recruit workers. Today’s jobs report underscores the economic importance of continuing to increase vaccination rates and the need to think more intently about how to solve the workforce crisis.”

Last week, the Kentucky Chamber Foundation released a new report highlighting Kentucky’s long-term workforce trends, root causes, and solutions. “20 Years in the Making: Kentucky’s Workforce Crisis” offers a wide range of actionable policy measures to support workforce participation and get more Kentuckians employed and looking for work. 

The September jobs report also showed a continued slowdown in overall job growth – the number of nonfarm payroll jobs added by employers. Employers added a total of 194,000 jobs in September, significantly lower than 2021’s monthly average of 561,000. These gains were also significantly lower than the August report, which showed more than 350,000 jobs gained. 

As of September 2021, U.S. employers had added back 78 percent of the 22 million payroll jobs lost in the first months of the pandemic. The economy remains more than 4.9 million jobs short of where it was in February 2020. 

The closely-watched Leisure and Hospitality sector has now shown gains of less than 100,000 jobs for two months in a row. In July, this sector saw a gain of more than 400,000 jobs. Some sectors actually saw job losses in September, including Motor Vehicles and Parts and Education and Health Services.  

The monthly jobs report includes the results of two surveys conducted by the U.S. Census Bureau and Bureau of Labor Statistics (BLS): the household survey, which looks at the labor force, and the establishment survey, which looks at employment and payroll. Data specific to Kentucky’s workforce trends in September will be released later this month.