US Job Gains Slip Under A Million, But Is Enough To Reduce Unemployment Rate

The US economy gained 661,000 jobs in September, far below the 1.4 million jobs added in August as coronavirus restrictions continue to lift, but it was enough to take another bite out of the unemployment rate. September unemployment declined to 7.9% from 8.4% in August, the Bureau of Labor Statistics (BLS) reported today.

The Private Sector Job Quality Index (JQI) produced by the Coalition for a Prosperous America (CPA) and its partners, however, was down once again. September’s JQI slipped by 0.36%, not much different than the previous month, to land at 82.93 points. It was 83.26 points in August. 

The lower JQI reflects a higher number of newly added production and non-supervisory (P&NS) jobs that paid less than the mean weekly income of all P&NS jobs and less than those jobs paying above the mean. Much of this may be due to service sector jobs returning in parts of the South, where there are less restrictions on restaurants.

Overall, the mean weekly income of all P&NS jobs increased to $839.89 in September, a change of 0.72% from August. This gain reflects the large number of previously-eliminated jobs that were added back to payrolls through July. 

The JQI for August was $833.84, a fall of 0.40% from July as more low-income workers return to the labor force. 

“The economy is on a recovery path although the rate of recovery has slowed down since the summer. The JQI shows that low-quality jobs, in other words jobs paying less than the US mean weekly wage for production workers, are coming back. We are still 9.8 million jobs below the level of a year ago. We need Congress to agree on a spending package to accelerate recovery,” says Jeff Ferry, chief economist for the CPA.

The JQI analyzes a representative sample of the economy using production and non-supervisory job data from 180 different industry groups spanning across all 20 super-sectors grouped by the BLS. The principal data utilized is contained in the Current Employment Survey (also  often  referred to as the “establishment survey”) P&NS data on average weekly hours, average hourly wage and total employment for each industry group, seasonally adjusted. The JQI is updated on a monthly basis along with the release of new employment survey data from the BLS.

The JQI remains volatile due to the unprecedented loss of over 9 million private sector production and non-supervisory jobs since March, when lockdowns began throughout the Northeast economic hubs and California. 

There were some notable job gains from today’s BLS release. 

Employment in leisure and hospitality, one of the hardest hit by the SARS 2 coronavirus, rose by 318,000 with most of that coming from restaurants. Overall, restaurant employment is down by 2.3 million workers since February.

Retail added 142,000 jobs in September with gains widespread. 

Meanwhile, Black and Hispanic unemployment rates, once in the low single digits, are now at 12.1% and 10.3%, respectively, and have shown little recovery over the last four weeks, based on BLS findings. CPA believes a stronger blue collar manufacturing base is needed to help lower those numbers.


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