Job growth remained strong overall in September, but declines in several sectors led to a slowdown compared to hot readings during the summer.
Leisure and hospitality was the standout sector, growing by 83,000 jobs. The sector has been consistently adding jobs since the Covid restrictions in 2020 shuttered many bars and restaurants. However, the sector is still more than 1 million jobs below its pre-pandemic levels, according to the Labor Department.
“It is a positive sign to see a sector that has been hit so hard continue its bounce-back with really strong gains here. It is moving closer to its pre-pandemic level, but it’s still 6.7% below where it was back in February 2020. It’s going to take a long time at its current pace to get back there,” said Nick Bunker, economic research director for North America at the Indeed Hiring Lab.
“That’s very clearly a part of the economy that can add more workers, but I think we are at a point now where we can say that leisure and hospitality’s share of employment in the U.S. labor market is probably going to be lower than it was before the pandemic,” he added.
Health care and social assistance also had a strong month, adding more than 75,000 jobs. Health care has now returned to its pre-pandemic employment levels, according to the labor department, and hospitals and ambulatory services each added 28,000 jobs in September.
The Labor Department includes those sectors in a broader sector, which includes private education, and that larger group added 90,000 jobs for the month.
But there were several areas that shed jobs last month, contributing to the slowdown in job gains. Government was the biggest laggard, dropping 25,000 jobs. Retail trade and transportation and warehousing combined to shed 9,000 jobs, reflecting a weakness in consumer spending on goods.
Bunker said the slowdown in retail appeared to be a matter of hiring slowing, as opposed to widespread layoffs, and that the government number could have been impacted by seasonal adjustments.
Strength in the construction and manufacturing areas, which added 19,000 and 22,000 jobs respectively, could cool some fears of an imminent recession in the U.S. Those areas have continued to add jobs even as the housing market and industrial survey data has suggested those sectors are seeing a slowdown in growth.