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September jobs report hints at unemployment benefits’ muted role in pandemic labor market

A Now Hiring sign hangs near the entrance to a Winn-Dixie Supermarket on September 21, 2021 in Hallandale, Florida.

Joe Raedle | Getty Images

The September jobs report issued Friday offered yet more evidence that pandemic-era unemployment benefits didn’t hold back the labor market in a significant way.

Job growth — 194,000 new payrolls — fell well short of expectations in September and decelerated from prior months. The labor force, a measure that counts workers and those actively looking for a job, shrank by 183,000 from August, according to the Bureau of Labor Statistics.

The data offers the first snapshot of the U.S. labor market since enhanced federal unemployment benefits ended on Labor Day. The September report suggests many workers didn’t find new jobs or jump off the sidelines to look for work, despite the expiration of those benefits.

That Labor Day “cliff” impacted about 8.5 million Americans, according to Labor Department data. More than 2 million others got a $300 weekly benefit reduction.

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Some economists and policymakers believed federal benefits were holding back the recovery. It’s becoming clearer that other factors, especially the Covid delta wave, have played a bigger role in limiting