Mohamed A. El-Erian , Columnist

Noisy Jobs Report Sends Mostly Competing Signals

Lackluster employment gains could be due to Covid or deeper structural problems. Either way, lawmakers need to act with urgency.

October 8, 2021 at 4:15 PM UTC

By Mohamed A. El-Erian

Mohamed A. El-Erian is a Bloomberg Opinion columnist. A former chief executive officer of Pimco, he is president of Queens’ College, Cambridge; chief economic adviser at Allianz SE; and chair of Gramercy Fund Management. He is author of “The Only Game in Town.”

Mohamed El-Erian breaks down the September jobs report.

Photographer: Bloomberg

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A relatively favorable interpretation of Friday’s U.S. jobs report is that reversible Covid-19 effects are temporarily undermining a strong and consistent economic recovery. A less favorable one is that the labor market is becoming more vulnerable to stagflationary winds. Unfortunately, the particularly noisy report does not allow for a firm conclusion. That may be good news for the Federal Reserve in the short term despite longer-term policy complications. The implications for Congress are less conflicting and call for more urgent action on physical and human investment.

Job creation in September amounted to 194,000, well below the median analyst forecast of 500,000. While the shortfall was offset by favorable revisions to earlier months amounting to 169,000, the overall outcome was still disappointing for an economy looking to maintain a strong and inclusive recovery.