Dear Commons Community,
The US economy saw another 661,000 jobs added back in September and a modest improvement in the unemployment rate, as the recovery in the labor market continues at a stagnating rate.
The Labor Department released its September jobs report Friday morning. Here were the main metrics from the release, compared to consensus estimates compiled by Bloomberg.
- Change in non-farm payrolls: 661,000 vs. +859,000 expected
- Unemployment rate: 7.9% vs. 8.2% expected
- Average hourly earnings, month over month: 0.1% vs. 0.2% expected
- Average hourly earnings, year over year: 4.7% vs. 4.8% expected
- Labor force participation rate: 61.4% vs. 62.0% expected
The addition in non-farm payrolls marked the fifth straight month of net job gains. Still, the economy remains far from recuperating the jobs lost during the nadir of the pandemic period in March and April. Between those two months, employment fell by more than 22 million. Through August, just 10.6 million jobs were brought back.
Even as the US economy brings back some workers, an increasing number of Americans have found their layoffs to be permanent. Fewer than half of unemployed workers reported being on temporary layoff or furlough in August, representing a major slide from the near-80% in the category in April. The number of permanent job losers in August rose by 534,000 to 3.4 million, with this measure having increased by 2.1 million since February.
Other labor market indicators ahead of Friday’s report offered a similar take on the state of the labor market in September – that jobs are still coming back on net but at a slowing rate, and with an undercurrent of layoffs and job cuts still taking place.
ADP’s monthly report on private payrolls, while an imprecise indicator of the Labor Department’s report, showed 749,000 jobs added back in September, for a print better-than-expected but still a step down from the multi-millions of job gains reported in May and June. New weekly jobless claims in mid-September —around the time that the Labor Department’s monthly non-farm payrolls survey takes place — fell below 1 million in a sharp improvement from the millions of claims added per week in the spring.
But job cuts have still remained elevated. The Challenger Job Report out Thursday showed that job cuts announced by US employers were 186% higher in September this year than last year, and also accelerated slightly from August.
Policymakers have stressed that the slowing labor market recovery suggests more must be done out of Washington to provide support to those impacted by the pandemic and efforts meant to contain it. Federal Reserve Chair Jerome Powell said in testimony before Congress earlier this month that the path ahead remains “highly uncertain,” and will “depend on keeping the virus under control, and on policy actions taken at all levels of government.”
Still, congressional lawmakers continue to struggle to reach a near-term agreement to unleash more fiscal stimulus into the economy. The lapse in enhanced federal unemployment insurance benefits in late July has chipped away at consumers’ spending power, threatening to slow further the economic recovery that began as business activity stirred back to life after closures. Other lapses have had a more direct impact on the labor market: The phase-out this week of federal aid aimed at keeping workers on payrolls has already led airlines to move ahead with tens of thousands of job cuts, based on announcements this week.
For the overall economy, these unemployment numbers are “highly uncertain” at best and troubling at worst.