The September jobs report disappointed on Friday, and one particular sector's decline worries U.S. Labor Secretary Marty Walsh.
Noting the declines in public education over the month after an initial rebound earlier this year, Walsh told Yahoo Finance Live (video above) that the drop was puzzling.
"In the educational sector, there's something going on there we have to do some more research on," Walsh said, "particularly the education public sector number. I think a lot of people expected with school starting that we'd see that number a lot higher... I'll say it was disappointing."
Employment decreased by 144,000 in local government education and by 17,000 in state government education in September. Employment changed little in private education, which dropped by 19,000.
The September drop "is likely due to the seasonal adjustment," Glassdoor Economist Daniel Zhao told Yahoo Finance. "Schools are running with leaner workforces because of the pandemic so the start-of-year hiring spree and end-of-year layoffs are both smaller than what the seasonal adjustment expects."
Seasonal adjustment refers to a technique in statistics that attempts to remove the influences of predictable seasonal patterns and reveal how employment changes month to month. Zhao added that looking at the seasonal adjustment over the course of the full year, "the changes will net out, but it does result in unusual spikes and drops on a monthly basis."
"Most back-to-school hiring typically occurs in September," the report stated. "Hiring this September was lower than usual, resulting in a decline after seasonal adjustment. Recent employment changes are challenging to interpret, as pandemic-related staffing fluctuations in public and private education have distorted the normal seasonal hiring and layoff patterns."
Overall, local government education is down by 310,000 jobs, state government education is down by 194,000, and private education is down by 172,000 since February 2020. In August, economists at J.P. Morgan wrote that as school districts resume in-person learning, the sector is "poised for strong job gains."
In response to the September number, J.P. Morgan's Daniel Silver wrote in a note that the 180,000 drop in education employment "was less than anticipated by the seasonal factors."
The Delta variant and the "persistence of COVID may still be preventing schools from returning fully to in-person instruction and it is possible that schools are having a hard time hiring some workers," Silver added.
Zhao noted that "disruptions to school reopenings due to the Delta variant may have delayed some hiring but those jobs are likely to return in the coming months as the latest wave of Delta recedes."
—
Aarthi is a reporter for Yahoo Finance. She can be reached at [email protected]. Follow her on Twitter @aarthiswami.
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, YouTube, and reddit