Labor Secretary Walsh: Jobs report 'not as bad as everyone is reporting'

Although the number of jobs added last month came in under expectations, U.S. Labor Secretary Marty Walsh asserted that the September jobs report is “complex.”

“I don't think it's as bad as what everyone is reporting,” Walsh said on Yahoo Finance Live (video above).

On Friday, the Labor Department reported that the economy added 194,000 non-farm payrolls in September, a weaker figure than the 500,000 that was estimated. Meanwhile, the unemployment rate fell to 4.8% compared to the expected rate of 5.1%.

“If you compare it to the Great Recession, it took us until 2016 to get under 5% [unemployment] in the Great Recession," Walsh noted. "In this particular case, the president and the administration, we’ve done it in about 19, 20 months."

Walsh attributed some of the factors weighing on the labor force to the "times we're living in," adding that the unsteady economic recovery is not unique to the U.S.

“Other economies all over the world, they're in the same situation: people not participating, people not coming back to work," he said. "So we still have work to do here.”

The labor force participation rate also fell to 61.6% from 61.7% in August, and Walsh said that there was “no question about it” that the U.S. had some work to do to get the labor force participation up.

A few 'bright spots' in the U.S. labor recovery

The labor secretary highlighted some modest gains in manufacturing and retail, as well as hospitality.

"Unfortunately, it's under what people projected,” Walsh said, adding that the expectations miss "is a direct correlation to the rise in the Delta variant."

The lower-than-expected employment in the education sector came as a particular surprise, with local government education jobs falling by 144,000.

“In the educational sector, there's something going on there that we have to do more research on, particularly the educational public sector number,” Walsh said. “I think a lot of people expected with school starting, we would see that number higher. I'll say, it was disappointing."

Walsh pointed to a few "bright spots" in the report, such as a declining unemployment rate for women, which was at 4.2% overall and 7.3% for Black women.

“I think that's a big issue here in our country — lack of child care," Walsh said about concerns over women's labor force participation rate. “Secondly, the fact that schools opened last month, I think that helped people as well. Schools are in person, they're not hybrid this year, that's another help here. I think in some cases, the higher wages are helping as well.”

'We're losing workers' in the medical field

An area of growing concern is the health care industry, which saw 38,000 jobs lost in nursing and residential health care facilities and 8,000 lost in hospitals.

“That’s concerning short term," Walsh said. "We have people who need those facilities, and we're losing workers in those areas. That's something that we all have to collectively get on."

Overall employment in health care is down by roughly 524,000 jobs since February 2020, and the nursing field, which had been dealing with a shortage even before the pandemic, is feeling the brunt of those losses.

While some nurses have pushed back against vaccine mandates implemented by hospitals and other health care facilities, Walsh indicated that's not the primary cause of the shortage.

“I don't think that was just about vaccination,” he said. “What I’m hearing, the number of people that do not want to get vaccinated in that medical industry, we're talking 1% to 2%. I think that what people have gone through the last year and a half has really opened a lot of people's eyes.”

Instead, Walsh said that the pipeline of educating and training nurses is playing a role in the shortage.

“We have 60,000 people in this country that are on waiting lists to get into nursing programs," he said. "We need to alleviate that burden, we need to create pathways, and get more programs open for nursing programs in our country, and also mental health services. In the Build Back Better agenda, there's a major investment in community colleges. We have an opportunity to partner community colleges with those waiting lists to create a pipeline of nurses and medical professionals in a very short period of time in an industry that needs it.”

Grace is an assistant editor for Yahoo Finance and a UX writer for Yahoo products.

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