Jobs day tweet storm, here we go: The labor market recovery continues to slow, with payrolls growing a disappointing 661,000 in September. The pandemic is not over, and a slowdown to this extent is worrying when there are still over 10 million jobs to recover.
This is still a services recession, as people remain wary of the virus risk and unwilling to do much in person. Leisure and hospitality is missing almost one fourth the jobs it had in Feb. Goods have done better construction, manufacturing, and retail closer to recovered.
Dwindling support is not helping, with expanded unemployment insurance benefits expired and fiscal spending fading overall. Local government is a drag as well, with a seasonally adjusted 231 jobs lost in September as public schools utilize remote work.
While unemployment fell, some of this was due to people leaving the labor force, a worrying sign that some of those who had been looking for work have stopped. Permanent job loss also up by 348,000 another serious sign that the more and more temporary layoffs won't be recalled
The overall message is clear and not surprising: the economy is not out of the woodwork yet. Removing fiscal support when we have only recovered half of the jobs we’ve lost is extremely premature.
We are only 7 months into this recession. The Recovery Act didn’t pass until 14 months after the Great Recession started. This reflects how much faster the government has acted, and had to act, but also shows how early we are in this challenge.
It would be very risky to assume the recovery is self-sustaining at this early stage. When the Recovery Act was past, we were down 5 million jobs. Today fiscal support is already fading and we still have over 10 million to go.
Permanent job loss is 2.5 million. If another 25% of the remaining 10 million jobs will become permanent in the coming months, permanent job loss is where it was when the Recovery Act was passed. This is too soon for mission accomplished.
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