You are here: Home » International » News » Economy
Business Standard

Slow recovery: US jobs rise less than forecast in September amid Covid-19

Nonfarm payrolls increased by 661,000 following an upwardly revised 1.49 million advance in August, according to data Friday from the Labor Department

Topics
US jobs | US job gains | US economy

Bloomberg 

jobs, jobless, unemployment, economy
The unemployment rate fell by more than forecast, dropping 0.5 percentage point to 7.9%, though the labor-force participation rate declined by 0.3 point to 61.4%, with declines particularly pronounced among women

slowed in September and many Americans quit looking for work, suggesting the economic recovery is downshifting as the country struggles without a Covid-19 vaccine or fresh government aid.

Nonfarm payrolls increased by 661,000 following an upwardly revised 1.49 million advance in August, according to data Friday from the Labor Department. That compared with the median estimate of economists for a gain of 859,000. The unemployment rate fell by more than forecast, dropping 0.5 percentage point to 7.9%, though the labor-force participation rate declined by 0.3 point to 61.4%, with declines particularly pronounced among women.

The report, the last before November’s presidential election, reflects a sizable decline in local education jobs, while gains in retail and temporary workers slowed. What’s more, persistently high jobless claims, along with this week’s announcements of tens of thousands of layoffs, also indicate widespread economic pain.

Lawmakers remain at odds over further stimulus to help jobless Americans and small businesses, though the latest numbers could add pressure to agree on a package.

With just a month left before the November election, the jobs data are being closely watched, though the contest was scrambled earlier Friday by news of President Donald Trump’s positive test for the The relatively strong rebound in jobs in prior months has been a talking point for Trump, who before the pandemic presided over the lowest unemployment rate in decades.

US stock futures extended losses following the jobs report, while 10-year Treasuries and the dollar were higher.

One of the key drivers of September’s payrolls figure was a 280,500 seasonally-adjusted drop in employment in state and local education, as budget cuts along with a switch to virtual education in many districts weighed on hiring. On an unadjusted basis, that figure actually rose, though by much less than typical for the start of the school year.

Failure to pass an additional stimulus could also spur further cuts in state and local government jobs.

Census Workers

Federal government employment fell by 34,000 in September, reflecting a drop in temporary Census workers in the month, after hiring of such employees gave a 238,000 boost in August.

The number of Americans who were classified as long-term unemployed jumped by 781,000 last month to 2.4 million. The category, which includes those actively searching for work for 27 weeks or more, underscores the lasting economic scars many Americans will have after months of joblessness.

In another sign that economic troubles are likely to persist, the number of permanent job losers rose by 345,000 to 3.8 million, a seven-year high, while the number of Americans on temporary layoff fell by 1.5 million to 4.6 million.

The labor participation rate for so-called prime-age women, between ages 25 and 54, fell for a third straight month, by 0.7 percentage point, compared with a 0.4-point drop among men. That figure -- which reflects those employed, plus the jobless who are actively looking for work, as a share of the population -- signals parents are increasingly leaving their jobs due to childcare obligations, with many students forced to learn virtually at home instead of in person.

Private payrolls rose by 877,000, which was in line with forecasts but still marked a slowdown from the prior month. Leisure and hospitality, which has suffered some of the biggest job losses, was the largest gainer among major sectors, adding 318,000 jobs -- though total payrolls remain almost 4 million below pre-pandemic levels.

Industries including oil, entertainment and financial services are all home to major companies announcing job cuts in recent days, which will take some time to show up in official data. Walt Disney Co. said Tuesday it’s slashing 28,000 workers in its slumping US resort business, while Royal Dutch Shell Plc will cut as many as 9,000 jobs as crude’s crash forces billions of dollars in cost savings and Allstate Corp. will shed 3,800 workers.

Aerospace manufacturer Raytheon Technologies Corp. also announced job cuts in September, while airlines began laying off tens of thousands of employees on Thursday after federal payroll aid wasn’t renewed. Negotiations between Republicans and Democrats on a new federal stimulus package resumed this week, but talks remain on life support after the House passed a Democrat-only $2.2 trillion package.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Sat, October 03 2020. 00:22 IST
RECOMMENDED FOR YOU
.