Jobs report shows economy, employment market cooling as questions of recession remain

The September jobs report shows the economy and employment market cooling but remaining steady. The labor market added 263,000 jobs, but that's down from the first half of the year when roughly 400,000 jobs were created a month. Stocks sank on Wall Street as investors feared more interest rate hikes. Economics correspondent Paul Solman reports.

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  • Amna Nawaz:

    The U.S. economy remained strong enough last month to create 263,000 new jobs. The unemployment rate fell to 3.5 percent, but that was after the labor force shrank.

    Overall, job growth remained solid. But it's dropped from the first half of the year, when the economy created roughly 400,000 new jobs a month.

    Stocks sank on Wall Street, as investors weighed the news and feared more interest rate hikes. The Dow Jones industrial average plunged 630 points to close at 29297. The Nasdaq fell 421 points. The S&P 500 slipped 105.

    Economics correspondent Paul Solman digs into the details.

  • Paul Solman:

    The economy kept cooking up jobs in September, but at a slower pace.

    So there are signs that hiring is cooling?

  • Nela Richardson, ADP Research Institute:

    It's not cooling. I would say it is normalizing. It's steady gains. And those are the kind of gains that we want to see in the economy. We don't want the labor market to overheat.

  • Paul Solman:

    And there were steady wage gains too, says economist Nela Richardson.

  • Nela Richardson:

    The Fed is worried about that wages are going to rise too much because the labor market conditions are tight. Main Street is concerned that their wages aren't rising enough to keep up with the pace of inflation and the cost of living.

  • Paul Solman:

    But, given continued inflation, most economists and the Fed see a labor market that hasn't cooled enough yet.

  • Nela Richardson:

    The unemployment rate went down to 3.5 percent. That is a 50-year historical low, again suggesting that the labor market is very tight and that the Fed needs to keep a really aggressive stance when it comes to inflation and how wages could drive inflation in the future.

  • Paul Solman:

    Sure enough, signs of a tight labor market still abound. Employers in sectors like restaurants can't fill the jobs already out there.

    Giovanni Peri, University of California, Davis: There are right now about 10 million, 11 million unfilled vacancies jobs.

  • Paul Solman:

    Labor economist Giovanni Peri.

  • Giovanni Peri:

    Before COVID, there would have been five million, six million, seven million unfilled jobs at every given time.

  • Paul Solman:

    One reason we are still seeing those signs?

  • Giovanni Peri:

    We have had many fewer immigrants come into the country since late 2019, both the documented and undocumented. And their population in working age and contribution to employment has essentially stagnated for two years.

  • Paul Solman:

    Well, how many people are we talking about? How many fewer working-age immigrants?

  • Giovanni Peri:

    You know, 1.5 million immigrants, a little less than that, that we are missing.

  • Paul Solman:

    Polls show many Americans are concerned about undocumented immigrants. But stagnant immigration overall has been a drag on the whole economy, as measured by GDP, estimates researcher Jose Ivan Rodriguez-Sanchez.

  • Jose Ivan Rodriguez-Sanchez, Baker Institute:

    The impact of not having enough immigrant workers, it was around 1.1 percent per year in 2020 and 2021, around roughly $200 billion. If we do not have enough workers, we cannot produce. If we cannot produce, people cannot have access to goods and services.

  • Paul Solman:

    The shortage of immigrants is especially acute in sectors like personal care that rely on them.

  • Adam Lampert, Manchester Care Homes:

    Eighty percent of our staff are foreign-born.

  • Paul Solman:

    Adam Lampert runs a Dallas, Texas, senior care company.

  • Adam Lampert:

    We're open every single day. We want people to call us. The reality is, is that the people who answer the call are immigrants.

  • Paul Solman:

    But there aren't enough of them to fill care jobs, for several reasons, including a clogged immigration processing system.

  • Adam Lampert:

    It's that our government is backlogged and that they don't have the resources to address the visas, which are central to employment.

  • Paul Solman:

    Another issue, a new legal ruling that's made the future of the Deferred Action for Childhood Arrivals, DACA, uncertain.

  • Al Flores, Attorney:

    At least 20 percent of our employees are DACA individuals who are given the authority to work while they're here.

  • Paul Solman:

    Al Flores is legal counsel for a chain of Texas restaurants.

  • Al Flores:

    The DACA individuals have been here since they were young, young children, but because of the lawsuit at some point will not be able to work.

  • Paul Solman:

    At her Atlanta electrical firm, Tonya Hicks cites another problem, years of deportations.

  • Tonya Hicks, Power Solutions, Inc.:

    Some people had the right to be here and go through the process, and they were still deported. And a lot of people lost their lives when they got into different countries. So, I think it's a little PTSD.

  • Paul Solman:

    Finally, the reason that's become a cliche: Most American-born workers won't do the jobs immigrants will, says Hicks.

  • Tonya Hicks:

    Some of them will work longer. Some of them will work in hotter conditions, because they are already conditioned to do that.

  • Paul Solman:

    The bottom line for the restaurants Al Flores represents?

  • Al Flores:

    You have got to have immigrant labor to keep our businesses going.

  • Paul Solman:

    And fewer workers means fewer people to care for loved ones, says Adam Lampert.

  • Adam Lampert:

    If we are stiff-arming immigrants as a policy in the United States, keeping them out, we're only hurting ourselves.

  • Paul Solman:

    With more jobs, more than 10 million already unfilled, and a civilian labor force that actually shrank last month, no wonder businesses are concerned.

    For the "PBS NewsHour," Paul Solman.

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