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What’s causing America’s massive supply-chain disruptions?


(WASHINGTON) -- As the U.S. economy struggles to fully recover from the coronavirus pandemic, supply-chain disruptions across the country are driving up prices and leading to a growing shortage of goods.

The supply chain bottlenecks -- around the world -- have caused record shortages of many products that American consumers are used to having readily available, from household goods to electronics to automobiles.

Moody’s Analytics has warned that problems "will likely get worse before they get better."

"As the global economic recovery continues to gather steam, what is increasingly apparent is how it will be stymied by supply-chain disruptions that are now showing up at every corner," Moody's wrote in a report.

Here is how experts answer some key questions:

What's causing the disruptions?

Analysts say that the lingering effects of COVID-19 mitigation strategies essentially reduced the production of goods and services, and the supply chain shortages now happening are the result of struggles to return to pre-pandemic levels.

"The result of that imbalance between supply and demand eliminated all the inventory and eliminated all the grease that allows the wheels of commerce to work smoothly," said Steve Ricchiuto, chief U.S. economist at Mizuho Securities.

Not enough warehouse workers, truck drivers

Economists believe there are several issues at work behind the supply chain shortages, including a growing number of workers quitting jobs key to keeping things running smoothly.

A record 4.3 million Americans quit their jobs in August -- the most since the Department of Labor started tracking this data in 2000.

"You have a bunch of sectors that just pay minimum wage and labor is just going to veer over to where it finds the most profit," said Vidya Mani, an associate professor at the University of Virginia’s Darden School of Business.

The Labor Department in July reported that the warehouse industry had a record 490,000 job openings. Companies such as Walmart, Target and Amazon are going to great lengths to attract warehouse workers with attractive benefits, including free college tuition.

With growing inflation jitters, many large retail employers are increasing their wages to keep up with rising prices, intensifying the competition among companies to make their most compelling job-offers amid the pre-holiday rush to hire workers.

The American Trucking Association in 2019 estimated that it would be short some 60,000 drivers, but those shortages increased due to retirements, and new truck drivers being trained due to COVID-19 closures.

“There is a shortage of drivers, and it is one of several issues contributing to problems in the overall supply chain,” said Sean McNally, an ATA spokesman. “However it is a reflection of the strong demand for goods – and everything consumers buy is delivered in a truck.”

At the same time, economists say large employers preparing to bring their staffs back to work in larger numbers had led to large purchases of bulk items.

So, what happens now?

Supply chain experts say that the best option for consumers right now is to wait and start tapering their demands for goods, or they may ultimately end up paying a higher price once those long-awaited products become available.

"It’s good to be aware of the fact that when we make our purchases that whatever we order is going to land at some point in time,” said Mani. “We see these immediate shortages and we just keep ordering and ordering. A lot of those consumer goods companies are going to just pass on those price increases to you.”

The Biden administration has made a concerted effort to try to close supply chain gaps and has pushed the president’s infrastructure plan as a means of addressing systemic supply chain issues. President Joe Biden announced that the port of Los Angeles would begin 24/7 operations to ease bottlenecks ahead of the holiday season.

"Strengthening our supply chains will continue to be my team’s focus," said Biden. "If federal support is needed, I will direct all appropriate action, and if the private sector doesn’t step up, we’re going to call them out and ask them to act."

But experts believe that untangling supply chain woes could take much longer.

How long before things return to normal?

"We are in for at least four to six months for it to actually catch a break,” said Nick Vyas, executive director at the Kendrick Global Supply Chain Management Institute at University of Southern California Marshall School of Business.

"So I think we're going have to go through the peak seasons with this bottlenecks, and although the bottlenecks may actually move from the ports into the inland, but the delay is, I do anticipate to be continued through the holiday season."

Disruptions to the supply chain at the pandemic’s onset, which caused months of shortages in PPE including N95 respirators, gloves, cleaning supplies and other critical care hospital equipment took nearly a year to resolve.

The federal government, specifically FEMA, had no clear guidance on the distribution of supply to the states leading to an oversupply of goods in some portions of the country while others experienced severe shortages.

Though the supply crunch is driving up prices, companies now have an opportunity to begin figuring out solutions, given the vulnerabilities that recent supply chain crises have exposed, including the deepening cargo ship gridlocks at the world’s busiest ports.

Gooten, a U.S. based supply chain company, facilitates brands and retailers in using on-demand manufacturing to grow their retail and e-commerce businesses on a global basis.

Companies that utilize on-demand production begin producing products only once they are purchased by a consumer, as opposed to forecasting what the demand for a product might be and then producing a set number of those products.

"We have to start that same just-in-time manufacturing model with everything else we produce, whether its apparel, wall art, home goods, toys we just have to shift our thinking,” said Mark Kapczynski, chief marketing officer at Gooten.

"If you’re a retailer, or you’re a brand and you have ten thousand pieces of, let’s say t-shirts, sitting on a box in a boat how do you sell anything?" he said.

Copyright © 2021, ABC Audio. All rights reserved.

Holiday travel may be more chaotic than ever this year, transportation experts say

Evgenia Parajanian/iStock

(NEW YORK) -- Holiday travel may be more chaotic this year, experts warn, as looming vaccination deadlines threaten airline and airport staffing.

Forty percent of the Transportation Security Administration (TSA) workforce hasn't received a single dose of the COVID-19 vaccine, the agency said Thursday, and they only have until Nov. 22 to get fully vaccinated.

"Even if they get half of that done by Thanksgiving, that leaves 20% not available to work," aviation expert Henry Harteveldt told ABC News. "Something's going to have to give. I'm really worried."

TSA said it is currently developing contingency plans, but anticipates "that the vast majority of TSA employees will get vaccinated."

Several major U.S. airlines are also grappling with the fast-approaching vaccine requirement deadlines.

American Airlines and Jet Blue are requiring U.S.-based workers to provide proof of vaccination the day before Thanksgiving.

"This is happening at perhaps the most difficult time ever," spokesperson for the Allied Pilots Association Capt. Dennis Tajer said. "We have a very high volume of flying and it's created a lot of uncertainty about the holiday travel period. Now you have some unknown quantity of pilots that that may go away and go through termination."

Out of the 14,000 American pilots Tajer's union represents, 4,000 pilots remain unvaccinated.

"We've heard about all the staffing issues that happen," Tajer said. "It's not just on the flight deck in the cockpit, it's happening throughout corporations everywhere."

Southwest's operational meltdown last weekend served as a potential warning of what's to come this winter.

Tens of thousands of passengers were stranded at U.S. airports due to the more than 2,000 flight cancelled within three days.

The airline blamed the multi-day mess on air traffic control issues, bad weather and "other external constraints."

On Thursday, Southwest said it's going to hire more than 5,000 employees by the end of the year to mitigate future issues and has 50% of the goal met.

With airlines booking their flights to 100% capacity, experts are concerned there is no wiggle room left in the system to recover if a major airline melts down during the busy travel season.

"The chaos that is the Thanksgiving and Christmas holiday travel season will be even more chaotic this year," Harteveldt said.

He recommends traveling on off-peak days and to book on the airline that has the most flights to your destination, even if that's not the airline you normally fly.

"Take the earliest possible departure in the morning that you can, because it gives you more leeway if something goes wrong," he added.

Copyright © 2021, ABC Audio. All rights reserved.

Ex-Boeing test pilot indicted for fraud in 737 Max probe


(NEW YORK) -- Boeing's former 737 MAX test pilot, Mark Forkner, was indicted for fraud Thursday for allegedly misleading regulators about problems tied to the aircraft's two fatal crashes. The ex-chief technical pilot is the first Boeing employee to be charged over the 737 Max's failures.

In October 2019, pilots struggled to regain control of the MAX and it plunged into the Java Sea off the coast of Indonesia. Five months later, another MAX crashed near Addis Ababa airport in Ethiopia just six minutes after takeoff, killing all on board and forcing regulators around the globe to ground the plane. Three hundred and forty-six people perished in both accidents.

Investigators found that both crashes were tied to the Maneuvering Characteristics Augmentation System, or MCAS, software, which had been designed to help stabilize the jet after heavier, repositioned engines placed on the aircraft caused the plane's nose to point too far upward in certain circumstances.

In both crashes, incorrect data from a faulty sensor caused the MCAS to misfire, forcing the planes to nose down repeatedly. MCAS was not mentioned in the pilot manual -- allowing pilots to enter the MAX cockpit without simulator training that would have cost the airlines more money.

"In an attempt to save Boeing money, Forkner allegedly withheld critical information from regulators," Acting U.S. Attorney Chad E. Meacham for the Northern District of Texas said in a release. "His callous choice to mislead the FAA hampered the agency's ability to protect the flying public and left pilots in the lurch, lacking information about certain 737 MAX flight controls. The Department of Justice will not tolerate fraud – especially in industries where the stakes are so high."

Internal messages that surfaced in October 2019 between Forkner and another Boeing pilot appeared to show the company knew about problems with MCAS in 2016, two years before the crashes.

The documents released by the House Transportation and Infrastructure Committee show Forkner told FAA officials that MCAS was safe despite calling it "egregious" based on simulator tests, according to internal messages and emails.

"I basically lied to the regulators (unknowingly)," Forkner said to his colleague in the messages.

Forkner was the main point of contact between the administration and Boeing in regard to areas like pilot training and manual recommendations, an FAA official explained at the time.

Boeing said in a statement in 2019 that Forkner's comments "reflected a reaction to a simulator program that was not functioning properly, and that was still undergoing testing."

In January 2020, Boeing released more than 100 pages of internal communications that the company itself called "completely unacceptable."

In one exchange, an unnamed Boeing employee says the 737 Max "is designed by clowns, who in turn are supervised by monkeys," after complaining about the flight management computer.

In another 2018 message a Boeing employee asks, "Would you put your family on a MAX simulator trained aircraft?"

"I wouldn't," he said.

"No," the colleague responded.

Boeing has since rewritten the MCAS software, receiving the FAA's approval for the jet to reenter commercial service on Nov. 18, 2020.

In January, The U.S. Justice Department charged The Boeing Company with "conspiracy to defraud the United States" -- concluding after a lengthy investigation that the company knowingly misled regulators while seeking approval for its 737 MAX aircraft.

In an SEC filing, Boeing said it agreed to the charge "based on the conduct of two former 737 MAX program technical pilots."

Copyright © 2021, ABC Audio. All rights reserved.

Henrietta Lacks family seeks justice: Grandchildren sue biotech company


(NEW YORK) -- The family of Henrietta Lacks, an African American woman whose cells were collected from her body and used for medical research without her consent in 1951, is seeking justice for their relative.

On Oct. 4, the 70th anniversary of her death, Henrietta Lacks' family filed a federal lawsuit against Thermo Fisher Scientific claiming unjust enrichment and nonconsensual use of her cells and tissue samples.

The Lacks family has retained Benjamin Crump as their lead attorney. Crump, who previously represented the families of George Floyd and Breonna Taylor, says he believes this case can bring justice to the family.

"This whole notion of her cells are being sold even to this day as chattel property when everyone benefits from it but her own family. Her own flesh and blood. It reminisces of days of slavery when they sold black people as chattel property and we never got to benefits from our labor, our contributions," Crump said.

In 1951, at the age of 31, Henrietta was diagnosed with cervical cancer and began treatment at one of the only facilities willing to treat African Americans, Johns Hopkins Hospital in Baltimore. During her treatment, a gynecologist preformed a biopsy on her and sent her tissue to a lab for research, without her consent or that of her family's.

In subsequent experiments with her tissue sample, scientists discovered that Henrietta's cells reproduced and thrived outside of her body -- a discovery that helped shape medical innovations.

Those cells were named, "HeLa" after Henrietta Lacks. HeLa cells have led to several medical breakthroughs including the polio vaccine, coronavirus vaccines, cancer treatments, AIDS treatments, zero gravity in space, and more.

What Henrietta Lacks experienced is now illegal and researchers are required to get consent before using a patient's tissue sample for research according to federal law.

The family members say they have not received any profit from the research and use of Lacks' cells. They say they believe the time is now to be compensated and they are aware they will have to fight as many as 100 defendants, the first being Thermo Fisher.

Thermo Fisher Scientific Inc., based in Massachusetts, sells HeLa cells on its website.

"Thermo Fisher Scientific's business is to commercialize Henrietta Lacks' cells—her-living bodily tissue—without the consent of or providing compensation to Ms. Lacks" the lawsuit states. "All the while, Thermo Fisher Scientific understands—indeed, acknowledges on its own website—that this genetic material [is] stolen from Ms. Lacks."

The lawsuit is also asking the court to order Thermo Fisher Scientific to "disgorge the full amount of its net profits obtained by commercializing the HeLa cell line to the Estate of Henrietta Lacks."

Christopher Seeger, another attorney for the Lacks family, said that other companies also will be targeted for commercializing Lacks' cells.

Thermo Fisher Scientific, he said, "shouldn't feel too alone because they're going to have a lot of company soon."

Lack's story emerged about a decade ago with the release of the book, "The Immortal Life of Henrietta Lacks."

Her story gained more national attention with the release of "The Life of Henrietta Lacks" movie. Oprah Winfrey starred as Henrietta's daughter, Deborah Lacks, and Renee Elise Goldsberry portrayed Henrietta.

Ron Lacks says his mother was the first person in the family to discover that cells obtained from her deceased mother-in-law, Henrietta Lacks, were still viable in 1973.

Ron Lacks is the estate's executor and the oldest grandson of Henrietta. For years he has been inspired by his mother's resilience to keep Henrietta's name alive and he is using this inspiration to fight for his family's ownership of his grandmother's legacy.

"Every time, I walk into my mother's room, she gives me strength because I know I'm doing it for her. She started this in 1973. She started this, so when I walk into her room and feed her, change her, I know I'm doing this for her." Ron Lack told ABC News. "When you fighting for your family, you come off with all guns blazing, you don't stop until you succeed or they knock me down," he added.

Johns Hopkins University states on its website that it has "never sold or profited from the discovery or distribution of HeLa cells" and that the university does not own the rights to the HeLa cells.

The university also claims it has helped the Lacks family broker an agreement that requires scientists to receive permission to use Henrietta Lacks' genetic blueprint.

Copyright © 2021, ABC Audio. All rights reserved.

President Biden to meet with port heads ahead of expected Christmas supply crunch


(WASHINGTON) -- With global supply chain bottlenecks threatening the Christmas shopping season, President Joe Biden will highlight his administration's work with ports on Wednesday and try to stave off the potentially politically explosive headaches Americans may face as delays threaten holiday gift-giving.

The president plans to meet with the leaders of the two busiest ports in the United States -- Los Angeles and Long Beach, both in California -- and the International Longshore and Warehouse Union, "to discuss the challenges that ports across the country and actions each partner can take to address these delays," White House press secretary Jen Psaki said Tuesday.

The port of Los Angeles, a senior Biden administration official said, will announce on Wednesday that it will move to 24/7 operations in order to help alleviate bottlenecks.

Several shippers and retailers will announce that they are taking steps to move toward 24/7 operations, too, according to senior administration officials.

According to the White House, Walmart will increase its use of nighttime hours; UPS will increasingly use 24/7 operations and enhance data sharing with ports; FedEx will increase its nighttime hours and make changes to trucking and rail use; Samsung will operate 24/7 over the next 90 days to move almost 60% more containers out of the Los Angeles and Long Beach ports; The Home Depot will move up to 10% more containers out of these ports in their off-hours each week; and Target will move 10% more containers during these off-peak hours.

Several of these companies and other stakeholders will participate in a virtual roundtable hosted by the White House Wednesday, according to the White House.

That dynamic carries great political risk for Biden, who has pegged his presidency to both pulling the country out of the coronavirus pandemic -- the onset of which precipitated this supply crunch -- and rebuilding the U.S. economy.

But Treasury Secretary Janet Yellen tried to temper fears Tuesday during an interview with CBS News.

“There may be isolated shortages of goods and services in the coming months," Yellen said. "But there is an ample supply of goods. I think there's no reason for consumers to panic about the absence of goods that they're going to want to acquire at Christmas.”

The White House launched a task force in June to address disruptions to supply chains and in August added a port envoy to that group.

"We certainly know addressing those bottlenecks at ports could help address what we see in many industries across the country, and frankly are leading people who are preparing for holidays, for Christmas, whatever they may celebrate, birthdays, to order goods and get them to people's homes," Psaki said Tuesday.

Copyright © 2021, ABC Audio. All rights reserved.

Diaper crisis escalates amid COVID-19 pandemic


(NEW YORK) -- As her belly curves in a small circle overlapping the top button of her jeans, Elisha White, 26, anticipates the birth of her fifth child.

White is currently unemployed and without a car, and though her family is pitching in and assisting her, she said her local diaper bank has been a saving grace now and since the beginning of her journey into motherhood.

"Ever since high school, they have always been there for me and been someone I can go and talk to," said White. "They are really important to families that need [diapers] and that can't afford them."

White's local diaper bank, The Diaper Bank of the Delta, which is located in Clarksdale, Mississippi, is the only organization in the state that is a part of the National Diaper Bank Network, which includes more than 200 independent diaper banks and pantries.

According to data from the organization, disposable diapers can cost up to $80 a month per child, with the average child needing up to 12 diapers daily. The federal government assistance programs such as Women, Infants, and Children (WIC) and Supplemental Nutrition Assistance Program (SNAP) do not allow funding for diapers to be expensed through them.

"Before the pandemic, [there] was already a need in our community, especially in our service. I am located in the Mississippi Delta, where most of our population is African American, and they were already struggling to afford diapers to properly diaper their children," said Chelesa Presley, executive director of the Diaper Bank of the Delta and member of Black Diaper Bank Leaders Group. "And then when the pandemic happened, oh my goodness."

In 2020, the National Diaper Bank Network distributed more than 100 million diapers to 220 diaper banks across the country -- a 67% spike from 2019. In addition, most child care facilities require parents to provide diapers for their child. Nationally, 57% of parents experiencing diaper needs who rely on child care said they missed an average of four days of school or work in the past month because they didn't have diapers to send with their children.

Presley said many low-income families and families of color spend twice as much on diapers for their children compared to families who have the means to buy diapers in bulk at a lower price.

"They're leaving the diapers on the babies longer," said Presley. "I can tell you more and more families are coming to us, and we've increased the number that we give out because they're saying, 'We're still not having enough to meet our needs.'"

"We were giving out 30 diapers. We've increased it up to 50, and some still need diapers to just completely diaper their babies because they just can't afford it," said Presley.

But Joanne Samuel Goldblum, the CEO and founder of the National Diaper Bank Network, said there is a greater need for diapers due to the COVID-19 pandemic, because many families lost their jobs and cannot afford diapers due to their price increase. As if that wasn't enough, the consumer price index -- the Labor Department's measure of what consumers pay for everyday goods and services -- spiked 5.4% over the last 12 months. In June alone, it jumped 0.9%

"The price of all commodities is rising," said Goldbulm. "So people have sort of latched on to this conversation about the diaper-pricing increase -- and it has, but so has almost every other commodity that we buy."

One in three American families are experiencing a diaper shortage, according to a 2020 report from the National Diaper Bank Network. Goldblum says internal research in 2020 found that National Diaper Bank Network members distributed on average 86% more diapers in 2020 versus 2019.

"Everybody knows that when a baby's crying, no matter who's around, somebody is going to say, 'Did you check their diaper?'" said Goldblum. "What does it mean, as a parent -- especially a new parent, you know, if it's a little baby -- not being able to meet that child's needs?"

Goldblum said that although the research for 2021 has not been released yet, diaper banks across the country are continuing to see the increased need for diapers and trying to continue to expand their capacity.

This is a problem that goes beyond diaper hygiene. Goldblum pointed to a 2013 study published in Pediatrics found that diaper need is more highly correlated with maternal stress and depression than any other material deprivation.

"Diaper needs impact children and it impacts caregivers," Goldblum said.

"It is a crisis and is a real problem for families who are struggling, and this is affecting our future," Presley said. "Our future children, it is affecting their health, it is affecting their mental health, and eventually in about 10 to 20 years, we're going to see the effect this pandemic has had because of diaper needs and mental health issues."

White said her local diaper bank will continue to help her and other mothers in need.

"It is so helpful for people who can't afford [diapers] right now during the pandemic," she said. "They are really helpful to me because I be about to lose my mind without them."

Copyright © 2021, ABC Audio. All rights reserved.

When should I mail holiday gifts? USPS, FedEx, UPS release 2021 ship-by dates


(NEW YORK) -- Each year, we spend time sweating over getting holiday gifts out in time and worrying about shipping delays.

This year, experts are warning of possible shortages and delays on getting everything from toys to artificial Christmas trees due to COVID-related supply chain issues, as well as reports of slower shipping service.

With that in mind, shipping services have released their recommended ship-by dates in order for packages to arrive on or before the Christmas holiday. The overall advice: The earlier you send, the better.

Scroll down for deadlines from USPS, UPS and FedEx:


Dec. 15: This is the last day for retail ground shipping.

Dec. 17: This is the last day for first-class mail service (including greeting cards) and packages up to 15.99 ounces.

Dec. 18: This is the last day for Priority Mail service.

Dec. 23: This is the last day for Priority Mail Express service.

More information on USPS holiday shipping deadlines can be found here.


Dec. 15: This is the last day for UPS Ground service.

Dec. 21: This the last day for UPS 3 Day Select service.

Dec. 22: This is the last day for UPS 2nd Day Air service.

Dec. 23: This is the last day for UPS Next Day Air service.

More information on UPS holiday shipping deadlines can be found here.


The company advises planning ahead to ensure gifts arrive on time. You can create your own shipping label at home and find a nearby location for easy drop-off service.

Dec. 15: This is the last day for FedEx Ground service.

Dec. 21: This is the last day for FedEx Express Saver and 3Day Freight services.

Dec. 22: This is the last day for FedEx 2Day A.M. and 2Day Freight services.

Dec. 23: This is the last day for FedEx 1Day Freight, Extra Hours, Standard Overnight, Priority Overnight and First Overnight services.

Dec. 24: This is the last day for FedEx SameDay, SameDay City Priority and SameDay City Direct services.

More information on FedEx holiday shipping deadlines can be found here.

Copyright © 2021, ABC Audio. All rights reserved.

Lego says its removing gender bias from its toys after new research


(NEW YORK) -- The Lego Group says it will remove gender bias from its iconic toys.

The Danish toymaker announced in a statement Monday, that it will get rid of gender references among its famous building block sets, after new research in a study commissioned by Lego found that "girls today feel increasingly confident to engage in all types of play and creative activities, but remain held back by society's ingrained gender stereotypes as they grow older."

The study carried out by the Geena Davis Institute in recognition of the UN's International Day of the Girl also marked the launch of Lego's new Ready for Girls campaign, which celebrates girls who rebuild the world through creative problem-solving.

"What we found is not only from the parents, but also from the boys that they were worried -- that they would be teased or made fun of for playing with toys that would be say, associated with girls, so it was the fear of being shamed and made fun of," Madeline Di Nonno, CEO of the Geena Davis Institute told Good Morning America. "With girls, they felt more confident than boys to engage in a variety of playing activity."

According to the research, 4 in 10 girls and nearly 3 in 4 boys surveyed said they felt uncomfortable to play with toys presumably targeted to the opposite gender.

Parents are four times more likely to encourage girls to engage in dress-up than boys and twice as likely to encourage boys in computer coding than girls, according to the survey, which also noted that the boys and girls surveyed agreed with the idea that some activities are gender-specific.

Another toymaker, Hasbro, recently rebranded its iconic Mr. Potato Head toy earlier this year and introduced a new gender-neutral potato head family with diverse body parts and clothes. And in 2019, Mattel released its first gender-neutral doll.

Retail giant Target announced in 2015 that its stores would not classify toy aisles by gender, a move that also paved the way for proposed legislation requring large retailers to provide gender-neutral toy sections.

A California law signed by Gov. Gavin Newsom over the weekend makes it the first state that mandates large department stores to display products like toys and toothbrushes in gender-neutral ways.

"This isn't a one-size-fits-all solution for every family -- and parents should encourage what their kids love and what they're interested in," parenting expert Ericka Souter told GMA. "We want the world to be open to our children and don't want them to feel limited by their gender -- companies are responding to this growing demand."

Lego said in a statement that it is "committed to making LEGO play more inclusive and ensuring that children's creative ambitions – both now in the future – are not limited by gender stereotypes. We know there is work to do which is why from 2021, we will work closely with the Geena Davis Institute on Gender in Media and UNICEF to ensure LEGO products and marketing are accessible to all and free of gender bias and harmful stereotypes."

Copyright © 2021, ABC Audio. All rights reserved.

Southwest Airlines CEO apologizes for weekend travel mess


(NEW YORK) -- Southwest CEO Gary Kelly apologized to the tens of thousands of passengers who were stranded at U.S. airports over the weekend due to widespread flight cancellations.

"I want to apologize to all of our customers, this is not what we want," Kelly said in an interview on Good Morning America Tuesday. "Unfortunately, it just takes a couple of days to get things back on track."

One of those passengers, Fabricia Amara, couldn't take her 14-year-old daughter to see her neurosurgeon in Miami because of the operational meltdown.

"They did not handle it properly," Amara told ABC affiliate KTRK. "They have no answers for you, they tell you that there's nothing we can do."

Amara's flight was just one of more than 2,200 flights Southwest has canceled since Saturday.

The airline initially blamed the multi-day mess on air traffic control issues, bad weather and "other external constraints."

But the Federal Aviation Administration (FAA) said in a statement that "there had been no air traffic control shortages since Friday," adding, "Some airlines continue to experience scheduling challenges due to aircraft and crews being out of place."

Kelly acknowledged air traffic control issues were not the cause, saying "a series of FAA Florida delay programs" on Friday contributed to the cancelled flights.

"There were no ATC issues over the weekend. That's absolutely true," Kelly said. "But I think any industry expert knows that it takes several days, if you have that large of an impact on the operation, to get the airplanes where they need to be and then to match the crews up with that."

The head of Southwest's pilot union blamed bad staffing for the disruptions.

"Until the company makes some changes in how they're doing business internally and scheduling our pilots, we're going to continue to see the problem," Capt. Casey Murray told ABC News.

Kelly said operations are "back to normal." According to FlightAware, there were 87 canceled Southwest flights as of 8 a.m. ET Tuesday.

"Things are much smoother today," he said. "We have a few more cancellations than we would normally have, but things are pretty well back to normal."

Copyright © 2021, ABC Audio. All rights reserved.

Facebook's oversight board to meet with whistleblower Frances Haugen


(NEW YORK) — The former Facebook employee who testified before lawmakers last week will now address her concerns with Facebook's Oversight Board.

Whistleblower Frances Haugen alleged blatant disregard from Facebook executives when they learned their platform could have harmful effects on democracy and the mental health of young people during her testimony before a Senate Commerce subcommittee last Tuesday.

Haugen, a former Facebook product manager, accused Facebook of "choosing to prioritize its profits over people" in her opening statement before lawmakers.

"You can declare moral bankruptcy and we can figure out a fix [to] these things together because we solve problems together," Haugen said.

Her remarks sparked a backlash toward Facebook from lawmakers and others on a range of issues, such as Facebook's ability to hold high-profile users accountable to its rules through its so-called "cross check" program, the effectiveness of which was called into question by a Wall Street Journal investigation.

"In light of the serious claims made about Facebook by Ms. Haugen, we have extended an invitation for her to speak to the Board over the coming weeks, which she has accepted," the board said in a statement Monday. "Board members appreciate the chance to discuss Ms. Haugen’s experiences and gather information that can help push for greater transparency and accountability from Facebook through our case decisions and recommendations."

The Oversight Board teased that "scrutinizing cross-check" will be among the issues discussed with Haugen. Further details on the upcoming meetings with Haugen were not immediately disclosed Monday.

"As the Board shared in September, we are currently looking into whether Facebook has been fully forthcoming in its responses on its ‘cross-check’ system and will share our analysis in our first release of quarterly transparency reports later this month," the panel said in a statement. "Facebook has also said it will ask the Board to review how cross-check can be improved and to offer recommendations."

The Oversight Board was launched to operate independently of Facebook and it decides how the company handles controversial issues, such as the decision to ban former President Donald Trump. Critics though have questioned how much autonomy and power the panel actually possesses when regulating the tech giant.

Facebook has responded to critics who claim the board is an attempt to shirk regulation on its website, saying the Oversight Board is "not a panacea."

"Facebook sees the board as an important but single piece within a wider content moderation regime, which includes updated internet regulations," the company stated on its website.

In a statement on Twitter, Haugen said she welcomes the opportunity to meet with the Oversight Board.

"I have accepted the invitation to brief the Facebook Oversight Board about what I learned while working there," she wrote. "Facebook has lied to the board repeatedly, and I am looking forward to sharing the truth with them."

Copyright © 2021, ABC Audio. All rights reserved.

William Shatner channels Captain Kirk for historic Blue Origins space flight

ABC News

(NEW YORK) -- William Shatner will make history Wednesday as he boldly goes where few have gone before while aboard Blue Origin's New Shepard.

The Star Trek actor who played the iconic Captain Kirk joined Good Morning America Monday along with his fellow flight crew members as they anxiously await their delayed departure.

"I'm deeply disappointed because I was building up the enthusiastic response, now we have to wait another day," Shatner said. "[But] it's really worth it. What's a day with this extraordinary experience that we're about to have."

The 11-minute ride to the edge of space about 60 miles above the earth's surface comes just two months after the first successful Jeff Bezos-owned space flight with Wally Funk, 82.

Shatner, 90, is set to become the oldest person ever to go to space and will hit weightlessness in zero gravity for about four minutes.

Blue Origin crew member Audrey Powers told GMA that this trip and opportunity was a long time coming.

"They offered me the opportunity to represent all those great people and sit in the seats, so I could not be more overwhelmed at the opportunity," she said. "I feel an enormous sense of responsibility to represent this team."

Glen de Vries, a fellow Blue Origin crew member and passenger, added, "this is how innovation happens."

"This is the beginning of a new time for space and we're on the beginning of a curve that's going to blast off," he said. "That's a metaphor for that adventure that we're literally going to have together. I can't wait."

Shatner said he expects plenty of Captain Kirk references as the world watches him and the crew in flight.

"Actually, I haven't heard Shatner in a long time," he said with a laugh.

New Shepard's 18th mission, NS-18, has targeted liftoff on Oct. 13, at 8:30 am CT from Launch Site One in West Texas.

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Facebook exec says company will make itself 'more transparent'


(NEW YORK) -- Facebook will implement new tools to increase transparency and safety for users following Tuesday's explosive whistleblower hearing, Facebook Vice President of Global Affairs Nick Clegg said Sunday.

"We will, of course, seek to make ourselves ever more transparent so people can hold us to account," Clegg told ABC This Week anchor George Stephanopoulos.

“We understand that with success comes responsibility, comes criticism, comes scrutiny, comes responsibility, and that's why we're the first Silicon Valley company to set up an independent oversight board that independently adjudicates on these difficult content decisions,” Clegg added.

Facebook whistleblower and former employee Frances Haugen testified before a Senate subcommittee last week, accusing the social media giant of ignoring evidence that its content is harmful to young users and dangerous to democracy.

“I saw Facebook repeatedly encounter conflicts between its own profits and our safety. Facebook consistently resolved these conflicts in favor of its own profits,” Haugen told senators. “The result has been more division, more harm, more lies, more threats and more combat.”

Facebook CEO Mark Zuckerberg denied Haugen’s claims in a statement following her scathing testimony. “At the most basic level, I think most of us just don't recognize the false picture of the company that is being painted,” Zuckerberg said.

Clegg said Facebook is working on giving users more control, acknowledging that they want to see “more friends, less politics.”

During Tuesday's hearing, Sen. Richard Blumenthal, D-Conn., said Facebook is “facing a Big Tobacco moment, a moment of reckoning.”

Clegg called the comparison “extremely misleading.”

“We can move on beyond the slogans, the soundbites, the simplistic charcuteries and actually look at solutions and, of course, regulations,” Clegg said.

Stephanopoulos also pressed Clegg on Facebook’s efforts to create a safer environment for kids and teens.

“You also say Facebook's job is to mitigate the harm and amplify the good on social media. But even researchers and -- critics -- say you can be devoting more resources to positive interventions for teens. Is Facebook prepared to do more on that?” Stephanopoulos asked.

“Yes, we are,” Clegg responded. “We're now going to not only provide those new parental tools but we're going to introduce new measures ... [if our] systems see that a teen is dwelling on content that may be correlated with something that's not good for their well-being, we would nudge them to look at other content.”

He went on, “We're also going to introduce new tools, what we call 'take a break,' to really kind of urge teens to take a break from using Instagram if they appear to be doing so, you know, for long periods of time."

Clegg defended Facebook’s algorithm, which prioritizes the content users see first and was a target of Haugen’s testimony. Haugen claimed Facebook’s algorithm incites misinformation and violence.

Stephanopoulos asked why the company does not just remove the algorithm altogether and display content chronologically. Clegg said that would make things worse.

“If you were just to sort of across the board remove the algorithm, the first thing that would happen is that people would see more, not less, hate speech, more, not less, information, more, not less, harmful content,” Clegg said. “Why? Because those algorithmic systems precisely are designed like a great sort of giant spam filter to identify and deprecate and downgrade bad content.”

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Turn up the volume: Automakers targeting audiophiles to lift sales


(NEW YORK) -- In 2005, when music producer and engineer Elliot Scheiner was working with the Foo Fighters on "In Your Honor," he had the rock group sit in an Acura TL parked outside the studio.

"We'd finish a mix and go out to the car to listen," Scheiner, an eight-time Grammy winner, told ABC News. "We listened to the album for two weeks in the car. We'd come back, make changes and go back to the car. We mixed these records based on the Acura."

The Foo Fighters were immediately captivated by the TL's immersive, crisp and precise sound system Schenier helped design with a team of Panasonic engineers.

"Dave [Grohl] went out and bought a car, he thought it was so amazing. [Eagles guitarist] Joe Walsh bought one too," Schneier recalled. "All the artists felt [the system] was the most unbelievable representation of what they do."

Automakers -- even mainstream ones -- have increasingly turned their attention to high-end, premium audio systems to attract buyers.

Scheiner, 74, continues to work closely with Panasonic on Acura's exclusive ELS Studio system. The most advanced ELS system, Studio 3D, now boasts 16 channels, 16 speakers and 710 watts, a powerful upgrade from the TL's seven speaker, 5.1 system. For Acura's second-generation TLX sedan, Twin Telford subwoofers were added to dramatically reduce and eliminate extraneous rattles and vibrations and guarantee accurate playback in the sedan's 17 speakers.

"When you put a speaker in the car, it sounds completely different," Panasonic engineer Mark Ziembe told ABC News. "The car changes it, makes it colored. We're trying to get rid of that car sound."

Techniques like dynamic enhancement, motion control and equalization are applied in the tuning process to make sure an Acura "sounds more like a studio," Ziembe said.

"We want people who buy these cars to be intimate with the artists," Ziembe said. "We want people to get into their car and have it be a sanctuary."

Cadillac decided to team up with AKG, an acoustics engineering and manufacturing company, on the revamped Escalade SUV.

"We really wanted to take Cadillac and the audio system to the next level and be different, be unique," Chris Lata, the engineering group manager for the Cadillac Escalade, told ABC News. "It was a global search and we had a lot of different proposals. AKG is a Grammy winning studio."

The AKG Studio Reference System in the Escalade comes with 36 speakers and 28 channels that provide a rich, acoustic environment for passengers. Lata said finding where to strategically place and integrate the speakers -- the A pillar, headliner, doors -- was a challenge in the massive Escalade.

"We worked very closely with AKG on the tuning ... there were lots of tweaking, listening evaluations, tests with the windows down, at highway speeds," he said. "Speakers had to get in the places and locations that give the best studio experience and immersive feel."

He went on, "When you get into an Escalade and listen to the AKG system, it's almost like you're hearing the music differently for the first time. We've recreated the live experience as if you're sitting there at the studio or stadium."

Brian Moody, executive publisher of Autotrader, said automakers are concentrating on premium audio systems to stand out among audiophiles and consumers who are spending more hours of the day inside their vehicles.

"When you hear the music the way the artist intended -- the subtlety, breathiness, crunchiness -- it's a huge enhancement in your everyday life," he told ABC News. "In the modern world of cars it's no longer enough to say I have cooled seats and leather and a sunroof. Automakers are taking audio more seriously. Premium systems become more about branding and exclusivity."

These systems may even matter more than a vehicle's performance stats or latest tech gadgetry, Moody argued.

"Millennials don't care that a car has a V8 engine," he said. "My 18-year-old son is way more interested in a car's sound quality than ride quality."

Tim Gunkel, a sound and acoustics development engineer at Mercedes-Benz, said he's seeing more young people seek out premium audio systems over engine size in their luxury vehicles. Mercedes is currently the only automaker to offer a 4D high performance stereo system where "you can actually feel the music, can feel the impact of the bass, when sitting in the seat," he told ABC News.

The 4D surround system, developed in partnership with renowned German audio company Burmester, took five years to engineer and is only offered in Mercedes' flagship S-Class sedan. The state-of-the-art system features 31 high-performance loudspeakers, eight additional exciters and a system output of 1,750 watts -- allowing the driver and passengers to perceive the rhythms of the music through the entire body and not just the ears.

"Burmester is connected to a lot of famous Berlin musicians and music producers," Gunkel noted. "Our customers tell us they like the audio system so much they go to the car to listen to their music."

British automaker McLaren first partnered with venerable Bowers & Wilkins, also based in the U.K., in 2015 for the 570S supercar. McLaren's audio engineers had to create a perfect audio system for its discerning customers while also factoring in the supercars' sonorous turbocharged V8 engines.

"At higher speeds, you're hearing a lot of noise from external sources," Matthew Dryden, McLaren's senior engineer for audio systems, told ABC News. "The system adjusts the bass frequencies to counteract the wind and tire noise ... the audio sounds the same but the user doesn't notice."

The tweeters in McLarens showcase Nautilus diffusers -- spiraling channels that dissipate reflected sound waves -- and every speaker seamlessly assimilates into the supercars' sleek, modern cabin. McLaren also chose Aramid Fibre, a high-end loudspeaker technology known for its robust nature, responsiveness and tonal qualities, in its Speedtail hypercar and GT.

"More and more consumers expect a vehicle's audio to match up to what they have at their house," said Dryden. "We want our customers to go on long journeys and enjoy the audio experience."

Karl Brauer, executive analyst at and a self-described audiophile, said a small but growing subset of consumers is willing to pay thousands of dollars more for higher quality, dynamic systems. The best way to test a vehicle's audio system? Put away the cellphone and plug in a USB to get that raw, unadulterated experience, according to Brauer.

"The number of speakers in cars has become a bullet point in marketing material," he told ABC News. "Don't be fooled by the specs -- you have to listen to the quality of the system. And execution of the hardware is even more important than the hardware."

For lawyer Greg Kovacevich, the ELS Studio system in his Acura TSX helps him tune out and survive his long commute home in Southern California traffic.

"I am sitting like cattle most of the time and I want good sound and a comfortable seat to enjoy myself," he told ABC News. "Premium sound is far more important to me than super tight handling or even fuel efficiency."

Kovacevich said he has sampled various audio systems made by other automakers but keeps coming back to Acura, with plans to soon buy the new TLX.

"The system is designed so well ... Elliot is amazing. The only place I listen to music is in the car," he said.

Copyright © 2021, ABC Audio. All rights reserved.

As stocks soar to historical highs, some experts say conditions ripe for correction


(NEW YORK) -- The stock market has been a roller coaster ride in recent weeks, with wild swings from day to day at times.

The major indices have also hit record after record this year as the as the economy roared back from pandemic lows and the government flooded the economy with stimulus cash.

The S&P 500 and Nasdaq Composite indices, for instance, closed at record-highs last month, besting highs that were only just set earlier in the year, and the Dow Jones Industrial Average of 30 large company stocks closed at a record-high a month prior. Despite a pandemic-battered economy, the S&P 500 and tech-heavy Nasdaq are both up approximately 30% compared to the same period a year ago, and the Dow is up more than 20%.

The trends have left some experts wondering whether the ground underlying the rapid growth of the market, fueled in part by a new crop of retail investors, is solid, or if there is a bubble building.

Risks abound, from the debt ceiling crisis to inflation fears and even China's Evergrande saga, which have led to daily swings.

But even as markets have fallen on news, the newfangled hashtags like #BuyTheDip (which encourages market participants to buy rather than sell during these down periods) and #DiamondHands (encouraging investors to hold onto assets rather than sell) often trend on Twitter in tandem with the fear-ridden headlines. Even the Fed has warned of vulnerabilities associated with the "increased risk appetite" demonstrated by retail investor exuberance seen in the "'meme stock' episode."

While the pandemic's abrupt disruption to American life is another reminder that it's impossible to predict the future, historical patterns and the precariousness of present market conditions have some economists warning that current growth rates may be unsustainable, especially amid inflation worries and potential tightening by the Fed of monetary policy.

Here's what we know and don't about the market landscape:

Key overvaluation indicator at highest level since the Dotcom bubble

One measure often used by economists to predict a potential asset price bubble is the cyclically adjusted price-to-earnings (CAPE) ratio, developed by economist and Yale University professor Robert Shiller. The measure looks at firms' inflation-adjusted real earnings per share over a 10-year period to indicate possible over- or under-valuations.

Itay Goldstein, a professor of finance and economics at the University of Pennsylvania's Wharton School of Business, told ABC News that the measure is essentially used as "an indication for whether the stock price is too high or not."

When Shiller first published his research in 2000, he pointed to how high stock prices were at that point relative to the fundamentals that should underly their prices. His book, "Irrational Exuberance" appeared in March 2000, highlighting how psychological factors can produce speculative bubbles and as it appeared, the tech-heavy NASDAQ Composite index began a 78% drop and the broader U.S. stock market took a 64% fall.

Presently, the CAPE Ratio hovers at around 37, its highest level since the 2000-2002 Dotcom crash -- higher now than the 30 it reached before the Black Tuesday crash in October 1929 that triggered the Great Depression. The historical mean is 16.8.

There have been criticisms of CAPE. Jeremy Siegel, a professor of finance at the University of Pennsylvania's Wharton School of Business, has argued in research that changes in accounting standards cause the earnings data to be biased downwards and thus the CAPE to be biased upwards. Others noted that the CAPE uses past earnings, but what investors are interested in is future earnings.

"You basically see that it's now still in historically high levels," Goldstein said of the CAPE Ratio. "If you go back in history, it was higher than that only around 2000 before the big crash of the Dotcom bubble, it wasn't even at that high a level in 2008 before the big financial crisis." In May 2008, before stocks started falling, the CAPE was 23.70.

"It's been high for a long time, and there was this crash last year when COVID started and then it climbed back up very quickly and continued to climb since then," he added. "It's hard to predict what will happen, but certainly it could be that the level is too high and there could be some correction."

Fears of overvaluation are not new, especially in the tech sector where the value of certain traditional fundamentals or research and development may be harder to quantify. Many tech companies are not earning profits now, but people are investing based on the hope that they will earn in the future. A measure such as CAPE that uses past earnings will not be useful for evaluating these companies.

Tech sector and risk appetite

Many market watchers, for example, have been ringing alarm bells surrounding the sky-high growth of Tesla stock in recent years -- arguing that its value does not align with its production output and fundamentals. On paper, the argument seems valid: Tesla's market cap, some $775 billion, is larger than the next five largest automakers combined.

Yet some with so-called #DiamondHands who have been able to ignore this have seen themselves become "Teslanairres" in recent years as the electric vehicle maker's stock value continues to climb.

Tesla aside, overvaluation estimates for the stock market as a whole is "speculative," Goldstein said.

"People can tell sort of an economic story that will justify -- my overall feeling is that it's too high and it's hard to justify that based on fundamentals," Goldstein said, referring to the market as a whole.

While he stresses it is ultimately difficult to know for sure whether stock prices are creeping towards a bubble, Goldstein said that, "The indicators that we see, I think give us some reason to be worried that stock prices might be too high."

The Federal Reserve also warned off rising asset prices being vulnerable to "significant declines should risk appetite fall," in its semi-annual Financial Stability Report released in May, noting that "prices are high compared with expected cash flows."

Fed Governor Lael Brainard pinned increased appetite for risk and rising valuations in part on retail investors, referencing "the 'meme stock' episode" in a statement accompanying the report.

"Valuations across a range of asset classes have continued to rise from levels that were already elevated late last year. Equity indices are setting new highs, equity prices relative to forecasts of earnings are near the top of their historical distribution, and the appetite for risk has increased broadly, as the ‘meme stock’ episode demonstrated," Brainard said.

The increased appetite for risk has also been seen in the bond market, Brainard added. "The combination of stretched valuations with very high levels of corporate indebtedness bear watching because of the potential to amplify the effects of a re-pricing event," he said.

Unique market conditions and inflation woes

When COVID-19 upended the economy in the spring of 2020, unemployment levels in the U.S. reached highs not seen since the Great Depression as lockdown orders forced businesses to shutter. In the midst of the crisis, the stock market fell sharply in March (when it had been at record highs) -- but then rallied back to reach new highs within months.

Much of the pandemic stock markets gains can be pinned in part to aggressive monetary policy by the Federal Reserve in response to the pandemic, some economists say. The Fed pulled out all of the stops, slashing the target for overnight interest rates to almost zero, buying massive amounts of Treasury and mortgage-backed securities, encouraging bank lending and taking other steps to sustain the flow of credit.

"What the Fed has done is it reacted to a public health crisis," Philip Schnaebl, a professor in finance and asset management at New York University’s Stern School of Business told ABC News.

"Now, the economy looks much stronger, obviously there's still risks with [the] delta [variant] and what's happening in emerging markets and so on," Schnaebl, who is also a research associate in corporate finance at the National Bureau of Economic Research, added, "But employment growth has been pretty strong, it looks like the public health crisis is not as severe as it used to be."

If the Fed starts tapering its purchases of securities -- which it signaled after its Sept. 22 meeting that it would likely start doing soon -- and when it looks to start raising interest rates, many economists are bracing for what this could mean for the stock market. The Fed has been buying Treasury securities and mortgage-backed securities each month starting in March 2020. Tapering means the Fed would slow its purchase of these assets.

Ending these pandemic-era policies would "lead to slow deflation of stock prices," Schnaebl said.

The Fed said it found concerns that a change in monetary policy, especially if the economic outlook hasn't improved, could lead to a "correction for risky assets," according to the investors , academics and more it surveyed as part of its market intelligence gathering for its Financial Stability report.

"Contacts observed that valuations of many assets have derived significant support from low discount rates and therefore may be susceptible to a spike in yields, especially if unaccompanied by an improvement in the economic outlook," the report said.

Overall, Schnaebl said he thinks the Fed has its "eye on the ball" and will be able to respond to stock market dangers that could spill over into the economy as a whole.

One possible wrench in the Fed's machine, however, would be if inflation takes hold and the central bank could no longer implement expansionary policy. Data from the consumer price index has stoked inflation fears, though the Fed has largely said that it should be temporary due to labor and supply chains issues as the economy emerges from the COVID-19 shock.

Historically, the stock market has served Main Street in the long run

Retail investors have pumped billions into the stock market in 2021, with some economists linking this to the rise of investing apps and pandemic stimulus funds that were distributed at the height of stay-at-home orders.

Ultimately, Stern's Schnaebl says it is hard to tell until after the fact if stocks are overvalued and a crash looms.

"There can be a lot of volatility in the short run, that's why the stock market is risky," he said.

"I'm less concerned about the stock market just on its own, sort of falling," he added. "I'm concerned about the health crisis and if that worsens, I think it would show up in the stock market."

A sudden drop in stock prices "would be bad, not necessarily because the stock market crashed, but probably because something else happened which made the stock market crash and that's not good news for the economy."

While price corrections can be scary for investors, they can also be viewed as a part of how equity markets work when prices adjust to reflect longer-term values.

Goldstein notes that asset "prices are just high, they are high across the board, across multiple assets." He sees a "significant likelihood" that stock prices will fall. The trigger for this could be monetary policy tightening, news coming out of China like Evergrande's threat to destabilize the international financial system, or some other factor.

"People are looking for where to put to put their money and make a decent return," Goldstein said of the new excitement in the stock market. "With all this in place, I think you have a combination of factors that contribute to high prices, and there could be a trigger that could come from different places that will eventually start the drop."

Even if economic outlooks in the labor market and beyond are positive outside of stock prices, Goldstein notes a sudden drop would impact the real economy as firms "become more cautious" by spending and investing less.

Many major Wall Street players are feeling the uncertainty. Over three-quarters of respondents to a CNBC Delivering Alpha investor survey say now is the time to be very conservative in the stock market when asked what kind of market risk they are willing to accept for themselves and their clients. Respondents include some 400 chief investment officers, equity strategists, portfolio managers and contributors to the financial news outlet.

Schnaebl noted that if a drop were to happen, "The question is why does it happen, and usually these things don't come out of the blue."

"I tend to think of the stock market in many ways is a reflection of what's going on in the economy rather than this is independent entity which is driving other things," he added, noting that if the a drop were sparked by the worsening of the virus it would be a blow to the economy as a whole that's reflected in the stock market versus not the other way around.

Still, the stock market has historically been a useful vehicle for those with #DiamondHands looking to save over the long term.

"For investors -- especially people saving for retirement and thinking about where to put their money so they can have a safer time in 10 to 30 years from now -- historically, the stock market has been a good place," Schnaebl said.

"My advice to everyday investors would be two things: first of all, diversify," Schnaebl said, "And second of all, invest for the long run."

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Employers add a dismal 194,000 jobs in September, unemployment rate at 4.8%


(WASHINGTON) -- Hiring in the U.S. fell far below expectations last month, with employers adding just 194,000 jobs versus the expected 500,000, as the delta variant slows the pace of the recovery.

The unemployment rate dipped slightly to 4.8%, the Department of Labor said Friday, but the latest hiring data comes after dismal job growth seen in August as well. Some 366,000 jobs were added in August, according to revised data released on Friday, and over a million jobs were added in July.

The more-contagious delta variant's impact on the recovery is likely reflected in the disappointing figures, as the labor market still finds itself at the mercy of the virus that saw new spikes earlier in the month when the employment data was collected. The unemployment rate still remains elevated compared to the pre-pandemic 3.5% seen in February 2020.

President Joe Biden touted the slight unemployment rate dip in remarks Friday after the report's release, calling it "a significant improvement from when I took office and a sign that our recovery is moving forward, even in the face of a COVID pandemic." The unemployment rate was 6.3% in January 2021 when Biden took office.

While Biden acknowledged he'd like to see "faster" job growth after two months of slower-than-expected gains, he lauded the "real progress" being made in the labor market.

"We're making consistent, steady progress," the president said. "And thanks to bipartisan agreements, we're making progress on funding the government and raising the debt limit, so people continue to get their social security checks, the military continues to get paid, and so much more."

Finally, the president seized the opportunity to defend his spending record and pitch his sweeping "Build Back Better" agenda, saying, "We risk losing our edge as a nation if we don't move our infrastructure."

"We have to regain the momentum we lost," the president said.

Notable job gains last month occurred in the hard-hit leisure and hospitality industry, which added some 74,000 jobs. Employment in leisure and hospitality is still down by some 1.6 million jobs, or 9.4%, compared to data before the COVID-19 shock.

Job growth in September was also seen in professional and business services (where hiring rose by some 60,000), retail trade (which saw an increase of 56,000 jobs), and transportation and warehousing (which gained 47,000 jobs).

Some labor economists say that despite the disappointing top line numbers in the latest employment report, there is still reason to have optimism about the labor market going forward.

"Despite the weak growth in September, today's report is a glimpse in the rearview mirror," Daniel Zhao, a senior economist at hiring site Glassdoor, said in a commentary shared with ABC News on Friday. "With the Delta variant wave receding, the worst of the Delta wave may be behind us."

Meanwhile, disparities in the pandemic's impact is still reflected in the latest Labor Department data. The unemployment rate for white workers was 4.2% last month compared to 7.9% for Black workers and 6.3% for Hispanic workers.

Zhao also noted that the latest report from the Labor Market is the first to reflect the expiration of federal enhanced unemployment benefits, yet the unemployment rate fell only slightly to 4.8%.

"The decelerating jobs growth in September is likely to disappoint employers and policymakers that hoped the expiration of enhanced UI benefits would push Americans back into the labor force," he said. "Ultimately, the September report will not be the final word in the debate over the impact of UI benefits."

"As we head into the fall, the resumption of school reopenings and expiration of UI benefits may push some workers back into the labor force, but red-hot labor demand is likely to keep labor shortages top of mind for employers," Zhao added.

The demand for labor is reflected in part in the rise in wages seen in recent months. In September, hourly earnings for all employees rose by 19 cents to some $30.85, and average hourly earnings for production and nonsupervisory employees rose by 14 cents to $26.15.

Meanwhile, approximately 13.2% of workers teleworked last month due to the pandemic, the DOL said, reflecting a trend that economists predict is likely here to stay even when the virus threat recedes.

ABC News' Libby Cathey contributed to this report.

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KJC Kennel Club





"Always in our Heart! "