Employment’s Recovery Road Comes to an End
Employment’s Recovery Road Comes to an End by David Haggith for The Great Recession
Jobs didn’t get much worse in September, but they stopped getting better.
This is a tale of where the recovery road for the US economy ended. Unemployment is the crux of the Covidcrisis economic story. While jobs showed a little improvement in September, a little digging through the numbers reveals the return to full employment has started a turn toward the worse. (Not as bad as “worst,” but “worse” than May-July.)
The two warmest parts of the economy during the September calm that I wrote about in my last article (“A September to Remember“) were the job market and the housing market. I promised to cover those in detail in separate articles because they are more important than the other currents I brought up and more complex to where the headline numbers don’t quite lay out an accurate picture. In this article, I’ll uncover what lies below the surface of the employment numbers.
Let us dig deeper into the slightly positive jobs reports of September
At the start of September, MarketWatch gave the first hints that the jobs recovery was waning:
‘What’s concerning is that the pace of jobs growth is slowing down’ — economists react to August jobs report
The August jobs report on Friday showed the coronavirus-battered U.S. economy recovered 1.4 million jobs last month, with the unemployment rate falling to 8.4% from 10.2%….
“Yes we’ve added large numbers the last few months, but still digging out of a very big hole.” — Martha Gimbel, economist at Schmidt Futures….
“What’s concerning is that the pace of jobs growth is slowing down. If we had nothing but months like Aug going forward, it’d take another 8 months to get back to Feb levels, and longer to get back to our pre-COVID trajectory.” — Ernie Tedeschi, economist at Evercore ISI….
“Unemployment breaking the 10% barrier so decisively is a big psychological lift … . The hiring of Census workers significantly added to jobs, but there were other key gains in the hard-hit retailing sector. Unfortunately, the easier jobs gains are over, and now we’ll be battling permanent layoffs once thought to be temporary, bankruptcies, secondary layoffs and maybe major layoffs in the airline industry. Expect that starting this month we’ll struggle to drop the unemployment rate as much, and possibly see break-even jobs months and even backsliding.” — Robert Frick, corporate economist at Navy Federal Credit Union.
And so it actually went in the month that played out.
New jobless reports stacked up like this at the start of September:
New jobless claims continued to drop, but they were still NEW jobless claims, coming in at a rate four times faster than seen before the Covidcrisis. Moreover, the entire tiny amount by which new jobless claims dropped is more than accounted for by the fact that our most populous state, California, stopped processing initial unemployment claims until it can resolve its the claims fraud it has identified.
Continuing claims also continued to drop but were still churning along at a much higher level than pre-COVID: