US employment growth slowed more than expected in September and more than 300,000 Americans lost their jobs permanently, causing a possible blow to President Donald Trump ahead of the controversial November 3 presidential election.
The Labor Department’s closely monitored employment report underscored the urgent need for additional fiscal stimulus to help the economy recover from a recession caused by the COVID-19 pandemic. The slowdown in the acquisition of complex problems for Trump, who announced one night that he had tested positive for coronavirus.
More than half of the 22.2 million jobs lost during the pandemic have been recovered. Former Vice President Joe Biden, the Democratic nominee, blames the economic turmoil on the White House’s pandemic, which has killed more than 200,000 people and infected more than 7 million people nationwide.
“The job report is increasing Trump’s woes,” said James Knightley, chief international economist at ING in New York. “The odds of betting are a reduced chance of winning re-election and a much greater chance of a clean sweep by Democrats.”
Wages outside agriculture rose 661,000 jobs last month, the smallest gain since the jobs recovery began in May, after rising 1.489 million in August. Each sector added jobs, with the exception of the government, which lost 216,000 jobs due to the departure of temporary workers hired for inventory and layoffs in state and local education departments, as many school districts shift to online learning.
Employment in the leisure and hospitality sector increased by 318,000, accounting for almost half of the profit in non-agricultural work. Wages are 10.7 million below the pre-pandemic level. Economists polled by Reuters had predicted that 850,000 jobs would be created in September. Employment growth peaked in June when wages rose 4.778 million jobs.
The unemployment rate fell to 7.9% in September, as 695,000 people left the workforce from 8.4% in August. Unemployment has fallen again from people who are wrongly classified as “employed but absent from work”.
Without this error, the government estimated that the unemployment rate would be around 8.3% in September. There were 3.8 million people who had lost their jobs forever, an increase of 345,000 since August. More experienced unemployment times, with the number of people not working for more than 27 weeks increasing from 781,000 to 2.4 million.
The slowdown in the labor market recovery is the strongest sign yet that the economy has shifted to lower gears in the fourth quarter. Growth was boosted in the summer by fiscal stimulus. Gross domestic product growth estimates for the third quarter exceed 32% of the annual rate, which will reverse the historic contraction rate of 31.4% in the April-June quarter.
Growth estimates for the fourth quarter fell by about 2.5% from above 10%.
“The virus is in the driver’s seat to control the speed of recovery and the economy is currently in a slow lane unless Congress and the White House can resolve their differences and provide additional stimulus,” Chris said. Rupkey, Chief Economist at the MUFG in New York.
Wall Street stocks fell. The dollar rose against a basket of coins. US prices were lower.
DYNAMIC DISPOSAL WORKS
The Democrat-controlled House of Representatives approved a $ 2.2 trillion bailout package on Thursday. Objections from top Republicans are likely to ruin the plan in the Senate.
New cases of coronavirus are on the rise, with an expected increase in the autumn, which could lead to some restrictions on service companies. Trump’s positive Koran test added political uncertainty that could extend beyond the election and make businesses cautious about recruiting.
Walt Disney Co. said this week it would lay off about 28,000 employees in the theme parks department. American Airlines and United Airlines, two of the largest U.S. carriers, said more than 32,000 workers had been laid off on Thursday without government assistance.
With so much long-term unemployment, economists believe the unemployment rate will not see the level before the 3.5% crisis until mid-2024 and could take a year to recover lost jobs. This could further widen the income gap.
The COVID-19 crisis has disproportionately affected the lower-income population and women who have left the childcare workforce.
The labor force participation rate, or the percentage of Americans of working age who are employed or looking for work, fell to 61.4% from 61.7% in August. The participation rate for women decreased to 55.6% from 56.1%. It did not change much for men.
“It may be that most home schooling is putting a gradual downward pressure on the labor force participation rate, which fell sharply in September for women,” said Robert Rosener, an economist at Morgan Stanley in New York.
Although people worked longer hours, one wage payer dropped from home on an annual basis for the sixth consecutive month.
“This, together with reduced fiscal support, will reduce consumer spending in the coming months,” said Kathy Bostjancic, chief economist at Oxford Economics in New York.
Report by Lucia Mutikani? Edited by Chizu Nomiyama, Andrea Ricci and Mark Potter