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The economic recovery is losing steam.
U.S. employment rose by 661,000 in September, bringing the total number of jobs added since May to 11.4 million, according to the U.S. Bureau of Labor Statistics‘ Friday jobs report. But that uptick is down from 1.5 million jobs added in August and 1.8 million added in July.
In all, the U.S. economy is down 10.7 million jobs from pre-pandemic levels in February. At its current rate of growth it would take 16 months to fully recover. But if the current trajectory holds, that rate of growth will continue to slow and a full recovery would take much longer than 16 months.
“There’s still an incredibly high number of new layoffs,” said Dante DeAntonio, an economist at Moody’s Analytics told Fortune. While net job growth is still positive, employers are laying off workers in droves: There were another 837,000 new unemployment claims reported on Thursday. For comparison, the pre-pandemic weekly record was 695,000—a record that stood for more than three decades.
The economic recovery has run into two major roadblocks. For starters, the pandemic continues to rage across the country, preventing a full reopening. That is particularly hard for sectors like hospitality and leisure, where jobs are still down 22.8%. The other major headwind is that stimulus from the $2.2 trillion CARES Act has largely run dry.
Another economic stimulus package is needed to prevent further economic slowing, DeAntonio says. It’s uncertain if Congress can get it done before the election. Democratic leaders want at least $2.2 trillion, while the White House refuses to go above $1.6 trillion.
The unemployment rate in September dropped to 7.9% from 8.4%. That marks five consecutive months of a declining jobless rate after peaking at an 80-year high of 14.7% in April. But it’s still well above the pre-pandemic rate of 3.5% in February—a 50-year low.
Jobless Americans who aren’t looking for work are excluded from the labor force and the unemployment rate calculations. So the 695,000 labor force decline in September actually helped to pull the unemployment rate down. In all, the labor force is down 4.5 million from February.
The June jobs numbers also show the economic slump is still hitting some communities harder than others. The jobless rate among white workers is 7%, compared with 8.9% for Asian workers, 10.3% for Hispanic workers, and 12.1% among Black workers. Among adult men the rate is 7.4%, compared to 7.7% among adult women.
We won’t get another jobs report until after the November 3 election. An unemployment rate of 7.9% could hamper Trump’s odds of reelection. Then again, Franklin Roosevelt, Ronald Reagan and Barack Obama all won re-election with an unemployment rate above 7%. In fact, the 7.8% jobless rate in September 2012—right before Obama’s reelection—is just .1% lower than it is as of September 2020.
