Economy adds 661K jobs in final jobs report before Election Day
The U.S. gained 661,000 jobs in September, the Labor Department reported Friday in the final jobs report before Election Day.
The unemployment rate fell to 7.9 percent in September as the U.S. posted its fifth consecutive month of job gains after the onset of the coronavirus pandemic triggered the deepest and quickest economic contraction since the Great Depression.
The report, however, came in well below the projections of economists and contained several red flags about the strength of the recovery from the coronavirus recession.
September marked the fourth consecutive month of declining job gains after additions of 4.7 million in June, 1.7 million in July and 1.5 million in August, according to revised figures released Friday.
Economists had expected the U.S. to gain roughly 800,000 jobs in September to push the unemployment rate down to roughly 8.2 percent from 8.4 percent in August. While the jobless rate fell below that level, the labor force participation rate — the percentage of potential workers seeking jobs — fell 0.3 percent, indicating declining confidence in the ability to find work.
Permanent job losses also increased for the second consecutive month, rising by 345,000 to 3.8 million, as the number of temporary layoffs declined by 1.5 million.
“The September jobs report was a troubling one, as job growth fell below expectations and thousands left the workforce” wrote Curt Long, chief economist at the National Association of Federally Insured Credit Unions (NAFCU). “The ranks of the unemployed continues to tilt away from temporary layoffs and toward permanent ones.”
Long also noted that 89 percent of the people who left the workforce in September were women, who have been hit far harder than men by the economic blow of the pandemic.
The report comes less than five weeks before Election Day, as voters decide whether to give President Trump a chance to fix an economy deeply damaged by the toll of the pandemic.
Lawmakers and the administration face a narrowing window to approve another stimulus deal as talks remain roiled by the impending election and rising coronavirus cases.
House Democrats and the Trump administration have struggled for months to strike a deal on another round of fiscal support for struggling households, teetering businesses and hard-hit sectors of the economy. The Democratic-controlled House passed a $2.2 trillion measure Thursday night, but that is well above the $1.6 trillion limit proposed by the Trump administration and even more expensive than the level sought by most Senate Republicans.
It remains unclear how Friday’s lackluster report, Trump’s contraction of the coronavirus or the growing signs of economic trouble will impact the negotiations.
Major corporations announced thousands of layoffs in the days leading up to the report, none of which were reflected in the data released by the Labor Department on Friday. A decline of 216,000 workers in government jobs may also bolster Democratic calls for more fiscal support for cash-strapped state and local governments.
“Job growth is moderating just as fiscal aid is expiring — a toxic cocktail,” wrote Kathy Bostjancic, chief U.S. financial economist at Oxford Economics. “The slowing momentum in the labor market bodes poorly for the broader recovery and points to increasing scarring effects from the crisis.”
–Updated at 9:16 a.m.