The gain of only 661 non-farm jobs hit economists, and observers hard, since they expected 800,000, gave earnest looks to Congress for relief, since the pattern that September has shown, despite net job gains over the last five months, has had the side effect of decreased consumer spending; and the looming spectre of permanent job loss, for some, makes for a bleak outlook.
CNBC reported that, “The decline in the unemployment rate came along with a 0.3 percentage point drop in the labor force participation rate to 61.4%, representing a decline of nearly 700,000.”
“However, a separate, more encompassing measure [the household survey] that counts discouraged workers and those working part-time for economic reasons also saw a notable decline, falling from 14.2% to 12.8%,” they added.
On the political side, the news also pokes a hole in the firm hope from President Trump that a strong economy would keep him in office another four years.
Notably, lower wage workers have yet been called back to work, while the higher wage earners are on the front burner, giving an even further push downwards to low end wage workers.
Of equal importance are the type of jobs that have been part of the rebound, and some have questioned both their value and the effect on wages, "The jobs being added aren't the jobs that were lost, because we're still in an uncontrolled pandemic -- people are going back to worse-quality jobs without increased pay," said Kate Bahn, director of labor market policy and economist at the Washington Center for Equitable Growth, to CNN.com.
With many of them working in restaurants, now facing cooler weather, and a dearth of outdoor diners, those in the East and North, owners may see a further decline in their ability to stay open, and make their obligatory rent payment, and close behind that, their payroll, especially for their servers, kitchen help and bus people.
For some, the good news was that the numbers fell for those stuck in part-time jobs, seemed to be an omen of good fortune, but that’s not the linchpin of a recovering economy, especially one firmly ruled by the COVID-19 virus which has severely hampered even the best of a laissez-faire economy.
As the Report noted, this, “declined by 1.3 million to 6.3 million,reflecting a decrease in the number of persons whose hours were cut due to slack work or business conditions. The number of involuntary part-time workers is 2.0 million higher than in February. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs.”
Help from Washington is in order, says Federal Reserve Chair, Jerome Powell, but House Democrats and the Senate GOP majority may be talking again, but the conversations have not led to a resolution, and with Trump’s recent diagnosis of having the virus (and a growing number of lawmakers also becoming positive), it seems that any gatherings of elected officials, for a vote, may be eliminated, even if there is an agreement between House Speaker Nancy Pelosi and Treasury Secretary, Steve Mnuchin.
The New York Times reported, “House Democrats on Thursday pushed through a $2.2 trillion stimulus plan that would provide aid to families, schools, restaurants, businesses and airline workers, and on Friday, House Speaker Nancy Pelosi expressed fresh optimism that a bipartisan deal for a broad coronavirus package could emerge out of her talks with Treasury Secretary Steven Mnuchin.”
That might change with the Senate anxious to confirm Amy Coney Barrett for the Supreme Court, and there were rumors, on Sunday, that there would be virtual votes, for that purpose.
With many in the media being quoted as seeing the economy in a”free fall”, or “losing momentum”, or “steam”, all have become commonplace adjectives, yet it’s clear that the American economy is, at best, in the first instance: a free fall, and that the only salvation lies in an agreement between Pelosi and Mnuchin, with the final word from Leader Mitch McConnell in the Senate.
Diane Swonk, chief economist for the accounting firm Grant Thornton in Chicago,was quoted from The New York Times saying, “It’s disturbing that we’re seeing such a dramatic slowdown in employment gains as we head into the Fall,” and added, “This is a red flag, we need aid now.”
Job loss, permanent job loss, is becoming a reality for many, and those losses are not only in the private sector, but the public as well, that began with the Spring shutdowns that slowed the revenue stream.
“Permanent jobs 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,” said Kathy Jones, head of fixed income at Charles Schwab. “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,” she told CNBC.
While job loss on this level is neither desired, nor welcome, it’s as sure as rain that it will come; especially for large cities such as Chicago, Los Angeles and New York, showing at average a possible loss of 2.5 million jobs with a net loss of 345,000.
For women who had been making employment gains over the last several months there was a decrease in participation in the labor market from 56.1 in August to 55.6 in September reflecting the need to either cut hours, or quit altogether to take care of, and or, teach children, alongside remote learning.
Close on the heels of losses and participation rates are job cuts, and Challenger, Gray and Christmas reported that cuts for September of 2020 were 186 percent higher than a year ago, in the same month.
“We are setting new records for job cuts even though things have improved since the earliest days of the pandemic,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.
“These are uncertain times for everyone, as many states are experiencing an uptick in the number of COVID-19 cases. It is clear we still have a long way to go before many industries can return to normal.”
“Year to date, the reason cited for the most announced cuts is COVID-19, which has caused 1,091,923 cuts in 2020. In September, market conditions caused 45,213 of the announced cuts, followed by 33,713 job cuts due to demand downturn, and 11,562 cuts due to restructuring. COVID-19 is the reason for 8,529 cuts last month.”
The most outstanding of the cuts were those from airlines and the announcement from American airlines and United that they would cut more than 32,000 workers if a deal was not reached by Congress was a spur for negotiations.
“Speaker Nancy Pelosi of California on Friday called for airlines to delay laying off or furloughing tens of thousands of airline workers, promising that the House would act in some accord to address the expiration of a program that has kept airline workers employed,” also said the Times.
We’ve noted before, that it’s all over but for the fighting, and it seems that Congress, especially with the Senate, that this begins, as America faces tragic consequences, including homelessness and food insecurity, in the coming months without Congressional help.
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