“The jobs number is positive, but it’s flashing warning signs,” said Ernie Tedeschi, a former Treasury Department economist. “It’s decelerating fast, and that worries me. If jobs growth is slowing, it’s going to take us longer and longer to recover from this recession."
The modest gains in jobs were driven by hiring increases in leisure and hospitality, which added 318,000 jobs back in September, mostly at restaurants and bars. Retail added back another 142,000 jobs, driven in part by hiring at clothing stores.
Government employment fell by 231,000, driven by declines in local and state education, an issue economists have been warning about for months.
"This is just proof positive that this is no V-shaped recovery,” said Mark Zandi, chief economist of Moody’s Analytics. “It’s going to be a slog. The economy risks stalling out with out any additional fiscal support.”
The decline in the September unemployment rate was also driven in part by a drop in the labor force participation rate, meaning that because many unemployed people gave up looking for work, the labor force shrank and the remaining unemployed were a smaller share of the workforce, Tedeschi said.
The participation rate for men, at 67.6 percent, is the lowest it has been in recorded history, outside of months earlier in the pandemic. For women, at 55.6 percent, it’s the lowest it has been since the late 1980s, raising more concerns about the ways in which the pandemic is setting women back.
The unemployment crisis continues to disproportionately affect Black, Latino, and Asian workers and women. Whereas the unemployment rate for White workers is 7 percent, it is 12.1 percent for Black workers, 8.9 percent for Asian workers, and 10.3 percent for Latino workers.
Also, the unemployment rate is 7.4 percent for all men 20 years and older, and 7.7 percent for women 20 years and older.
There are 10.7 million fewer people with jobs than there were in February before the pandemic, although just over half of the jobs lost in March and April have been recovered. At this rate, it would take the economy another 16 months to gain back those jobs, although economists say that job gains get more difficult for every month that the recession lasts.
Such economists as Tedeschi and Zandi say that the longer the recession lasts, the more the economic damage leaves permanent scars — reshaping industries, consumer preferences and workforce dynamics for years to come.
“A lot of jobs are gone — just aren’t coming back due to shifts in demand as a result of the pandemic,” Zandi said. “It’s going to affect all kinds of jobs, and business models will change.”
The economic report, based on a survey that is taken during the first half of the month, comes on the heels of warning signs for the economy.
Several companies have announced wide-scale layoffs in recent days, including Disney, American and United Airlines, and Allstate.
Unemployment claims, which have remained above historic records every week since the worst of the pandemic, show that job losses remain a threat to the push to bring the economy back.
Permanent job losses increased in the September jobs report by 345,000, part of a rise of 2.5 million of these longer-lasting losses since February.
But the country’s long-term economic outlook will be greatly impacted by the decisions of policy makers and the management of the pandemic, which remains a persistent threat to the economy.
Economists warn that without further government assistance for businesses and households, the economy is at a risk of sliding backward. Negotiations between House Democrats and the White House are progressing but have yet to produce meaningful breakthroughs.
State and local governments and businesses have struggled with plans to reopen, and public health officials are worried that another spike in the virus this year could constrain the recovery even more.
The news that President Trump and first lady Melania Trump had tested positive sent the stock market tumbling on Friday.
The jobs report continues to be affected by a misclassification error that had skewed earlier reports, according to the Bureau of Labor Statistics. If not for the error, the unemployment rate would have been 8.3 percent, four-tenths of a percentage point higher.