New jobs report expected to underscore slowing recovery
The final monthly jobs report before Election Day will be released Friday, giving voters one last glimpse into the state of the labor market before they decide whether to give President Trump another four years to fix it.
The September jobs report is expected to show the U.S. adding roughly 800,000 jobs with the unemployment rate dropping to 8.2 percent, according to projections from economists. If those predictions hold up, the U.S. will have recovered roughly half of the more than 20 million jobs lost to a pandemic that derailed the strongest labor market in half a century.
Another month of solid job gains may help Trump and Republicans sell their ability to bring the economy back to the 3.5 percent unemployment rate it enjoyed before the pandemic. The strength of the pre-pandemic economy appeared to be Trump’s most compelling argument for reelection, particularly among swing voters in industrial and Midwestern states that will likely decide the election.
Even so, the slowing pace of the recovery and the persistence of the pandemic will pose challenges for Trump’s pitch.
“The mishandling of the pandemic that led to unnecessary job losses and permanent damage to the labor market, that’s likely to be the historical legacy of the Trump administration,” said Joe Brusuelas, chief economist at audit and tax firm RSM.
“That will likely be the prism through which most voters look at the administration’s handling of the economy,” he said.
The U.S. entered 2020 with the lowest employment rate in 50 years, rising wages, increasing household incomes and narrowing racial disparities in joblessness. Trump was poised to capitalize on the solid economy as he sought another presidential term.
But as the coronavirus spread through the U.S in February and March, states and cities were forced to shut down businesses and impose strict social distancing orders. The blow of the pandemic wiped out more than a decade of job gains in just two months and caused the quickest and steepest economic collapse since the Great Depression.
Trump has blamed China for both the virus and economic damage, and has also criticized Democratic governors for exacerbating the economic damage with lockdowns.
At the same time, he has taken credit for the recovery that has taken place.
“What happened is we closed it down and now we’re reopening and we’re doing record business,” Trump said during Wednesday’s presidential debate. “We had 10.4 million people in a four-month period that we’ve put back into the workforce. That’s a record the likes of which nobody’s ever seen before.”
Trump is banking on the recovery from the pandemic-driven recession and the memory of the economy that preceded it to outweigh his handling of the health crisis that caused it.
An issue, however, is the slowing of the recovery.
The pace of job gains is on track to slow for the fourth consecutive month after additions of 4.7 million in June, 1.5 million in July and 1.4 million in August. Permanent job losses also increased in August after staying flat in July, and roughly 26 million Americans are on some form of jobless aid with many facing expiring benefits.
“The economic pain easily extends to over 33 million people in the economy today, and that doesn’t include those who had lost their jobs and regained employment but got behind on their bills or those who lost loved ones and providers to illness,” wrote Elise Gould, senior economist at the left-leaning Economic Policy Institute, in a Wednesday preview of the jobs report.
Economists have warned since the start of the pandemic that the U.S. will be unable to fully recover from the coronavirus recession until the virus is under control and Americans can safely gather in large groups and tight spaces. The longer the pandemic goes uncontrolled, they warn, the longer it will take for restaurants, bars, entertainment venues, hotels and resorts to reopen.
That dynamic is particularly daunting for the employees who depend on jobs in those industries and have been unable to work from home or find new jobs. A solid September jobs report may not reflect the intensifying hardship those laid-off workers are facing.
“I do worry that that group of people who have been brought off the sidelines in a healthy economy are now displaced, and their next-best job is also displaced,” said Federal Reserve Bank of Richmond President Thomas Barkin in a Thursday interview with Bloomberg TV.
“It will be hard to get back to where we were until the end of next year.”
Barkin added that the failure of the Trump administration and lawmakers to strike another fiscal stimulus deal will only add to the issues facing millions of Americans as they cast their votes.
“If there is not one in the short term, there are people down on their luck who will get less support than they otherwise need,” he said.