The U.S. suffered a very disappointing September jobs report as only 194,000 positions were added in the past month, falling well short of the projected 500,000, according to the Labor Department.

The total also fell short of the 366,000 jobs gained in August as unemployment fell from 5.2% to 4.8%, compared to the expected 5.1%. Hourly average earnings rose 0.6% compared to the expected 0.4%, and hourly average earnings year-to-year rose 4.6%, as expected.

September marked the ninth month of consecutive gains as the economy grew slower than expected. The civilian labor force remains down by 3.1 million workers compared to February of 2020 as the country slowly recovers from the worst of the COVID-19 pandemic.

Public sector payrolls dropped by a net of 123,000 and local government education jobs fell 144,000 with state and government jobs falling 17,000.

“The good news, for markets, is that this weak report, combined with the extension of the debt ceiling deadline to shortly after the next Fed meeting, makes the Fed less likely to start the tapering process then,” says Brad McMillan, chief investment officer for Commonwealth Financial Network.

“The disappointing 194,000 gain in non-farm payrolls in September probably still counts as 'decent' enough for the Fed to begin tapering its asset purchases next month," Andrew Hunter, senior U.S. economist for Capital Economics, wrote. Hunter adds the worsening labor shortages are “putting serious pressure” on wage growth which will be a great cause for concern for Fed officials in the coming months.

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