CNBC reports The September jobs report showed Black unemployment dropped sharply from the prior month, but workers leaving the labor force complicated the recovery picture.

The overall U.S. unemployment rate dropped to 4.8% from 5.2%, according to the Labor Department report, better than the expected 5.1%. But jobs growth disappointed, with 194,000 nonfarm payrolls added in September, compared with the 500,000 expected.

For Black workers, the unemployment rate fell to 7.9% in September from 8.8% in August. That’s the largest drop when compared with other racial groups in the jobs report. It’s also notable considering the labor market recovery for Black Americans has lagged other groups throughout the pandemic.

However, the labor force participation rate of Black Americans also fell to 61.3% in September from 61.6% the previous month. That figure dropped just slightly for white workers, by one-tenth of a percent, and rose for Hispanic and Asian workers.
The shrinking Black labor force suggests the improved unemployment picture for Black Americans can be attributed partially to job seekers exiting the labor force rather than an indication of longer-term recovery, economists said.

“The improvement in this month’s unemployment rate is misleading given the decline in the participation rate, in particular when you look at Black men and women,” said economist Valerie Wilson a director at the Economic Policy Institute.

“I don’t think that is signaling any acceleration or improvement in the pace of recovery at this point,” Wilson added, noting the difficulty of drawing conclusions about labor market trends from month-to-month changes.

The combination of falling unemployment rates and labor force participation indicates a division in the economic recovery, according to William Rodgers, director of the St. Louis Federal Reserve’s Institute for Economic Equity.

“You have a set of people who are benefiting and being drawn into the economy and finding opportunity, but then you have another set of people who face barriers, hurdles, constraints that are putting them in positions to where they are leaving the labor force,” Rodgers said.

Unemployment benefits ended, but hiring did not surge in September

CNN reports Out-of-work Americans did not rush back into the job market after beefed-up unemployment benefits ended nationwide in September.

The labor force shrank last month for the first time since May, signaling that more people were opting to sit on the sidelines and not actively look for work, according to the federal jobs reportreleased Friday.

"If unemployment benefits were the driving force behind labor market dynamics, then you would not have seen that effect," said Gordon Gray, director of fiscal policy at the American Action Forum, a right-leaning think tank.

The jobs report, which disappointed on several fronts, came at a time when the nation was contending with both elevated levels of coronavirus cases and a return to school for millions of children.

Despite a record number of openings, employers added an anemic 194,000 jobs -- far fewer than expected for the second month in a row.

While experts caution against drawing conclusions from one or two months of data, the September jobs report provides yet more evidence that pandemic unemployment benefits did not greatly contribute to the country's labor shortage. Other factors -- including child care issues, virus fears and workers' reevaluation of their life goals -- are playing a major role in prompting people to remain at home, economists said.

The latest report undercuts the argument made by many Republicans and business owners that the nation's economic recovery was being slowed by a federal safety net they deemed too generous.

Governors in 26 states -- all but one Republican -- opted to terminate at least one of the three pandemic unemployment programs in June or July, saying it would help solve staffing shortfalls. (Courts in two states later required officials to continue the benefits through early September.)

However, after they did so, employment did not grow substantially faster in those states, previous studies and government data have found. [MORE]