As the summer surge of COVID-19 infections subsided, job growth in the United States likely increased in September, driving demand for high-contact industries like dining out and allowing the Federal Reserve to begin reducing its monthly bond purchase.
The constantly monitored jobs report from the Labor Department on Friday also shows that the seeming dramatic slowdown in economic activity for the third quarter was most likely only transitory. Despite this, the labor market and the broader economy are still hampered by the COVID-19 crisis' worker and raw resource shortages.
"I think the jobs report should be pretty good," James Knightley, chief international economist at ING in New York, said. "However, there are still constraints in the labor market, as the labor supply story remains relatively restricted."
Based on a Reuters poll of experts, non-farm payrolls likely increased by 500,000 jobs last month, putting employment at approximately 4.8 million jobs below than it was in February 2020.
The number of jobs estimated ranges from 700,000 to 250,000. In August, the economy added 235,000 jobs, the fewest in seven months, as growth in the leisure and hospitality sector slowed.
Aside from the COVID-19 Delta variant, a seasonal anomaly was also a drag, and economists anticipate that August payrolls will be revised upward, as has been the case in previous years.
The survey of data from state and local governments as well as health agencies, the number of new infections in the United States is declining, with an average of 100,815 new illnesses reported each day.
The employment report for September is the last one available before the Fed's policy meeting on November 2 to 3. The Fed indicated last month that it could begin decreasing its monthly asset purchases as early as November.
To achieve the central bank's criteria for halting its enormous bond-buying program, Fed Chair Jerome Powell said "a relatively positive employment report" would be required.
Last month, labor market data were mixed, as private payrolls increase was greater than predicted, according to the ADP National Employment Report released on Wednesday. Between mid-August and mid-September, the number of people on state unemployment lists fell.