(TheFreedomFlag.com)- The economy added more jobs in September, and the unemployment rate fell — but both by lower-than-expected numbers. This could signal that the U.S. economy’s recovery is slowing considerably.
The Department of Labor released its monthly jobs report Friday, which revealed that nonfarm payroll increased by 661,000 jobs in September, with the unemployment rate sitting at 7.9%.
Dow Jones surveyed economists before the release of the report, and they were expecting around 800,000 jobs to be added. The big culprit in the discrepancy between expected and actual job gains were government jobs, which remained low for both public schools and at the Census Bureau.
MetLife’s chief strategist, Drew Matus, commented:
“The issue is momentum, and I think we’re losing it. When you go through a significant disruption to the labor market, it takes time to fix itself. That’s without regard to whether there’s a virus.”
The gains were strongest in the hospitality and leisure industries, where 318,000 jobs were added in September. Retail also added 142,000 jobs, while employment in social assistance and health care rose by 108,000.
State and local government education saw a big drop of 216,000 jobs in September. This happened because a lot of schools have either implemented a full remote learning curriculum for the start of the school year, or a hybrid model of remote and in-person learning.
Census Bureau jobs dropped by 34,000 in September as well.
Other industries that saw job gains included professional and business services (89,000), transportation and warehousing (74,000), manufacturing (66,000) and financial activities (37,000).
While temporary layoffs decreased by 1.5 million, and people holding part-time jobs for financial reasons dropped by 1.3 million, there were troubling signs in September’s report regarding full-time jobs.
In September, permanent job losses grew to 3.8 million, a 345,000 increase by the month before. Since February, permanent job losses have totaled 2.5 million in the U.S.
Charles Schwab’s head of fixed income, Kathy Jones, commented:
“Permanent job losses rose by more than 300,000. That’s not a good thing. The labor force participation rate declined, which pulled the overall unemployment rate down. That’s not a good sign, either. We’re looking at state and local government layoffs. We’re looking at a higher level of permanent job losses and more people leaving the workforce. None of that is good for the long run.”
While the country has seen consistent job growth since the pandemic began, the concern is the slowing of that growth — and the underperformance compared to analysts’ predictions.
Erica Groshen, who is a former commission at the Bureau of Labor Statistics, commented:
“The big issue that we’re facing now is the recession itself is probably beginning to take hold. Now, we’re entering a phase where the recessions effects are likely to become more salient, because the policy interventions have expired mostly.”
Groshen said many companies are being cautious with their money, and households across the country are doing the same. There are fears, of course, of a “second wave” of the pandemic hitting sometime in the fall and winter, and fears of that could be causing a slow in the economic recovery.”