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A new ray of hope arises in the hearts of unemployed US citizens as the Government adds back 875,000 jobs in September

A new ray of hope arose in the hearts of US citizens as the rate of employment increased in the month of September. Back in August, 1.4 million new jobs were added by firms, which led to a 10% decrease in the unemployment rate for the first time since the pandemic hit. 

It was reported that further 875,000 job opportunities were available in September, as several firms began to hire staff again. Temporary hiring also helped boost the recovery pace in the labor market, helping the economy rebound from the coronavirus recession. 

Wells Fargo economist Sam Bullard said “Strains on businesses due to the ongoing virus-related downturn and expiration of fiscal support should weigh on hiring,”  

“Having boosted total employment by 240K in August, Census hiring will become a drag on the headline to the tune of 40K jobs. Another potential headwind is around seasonality. Historically, seasonal factors suggest a pickup in hiring this month as school starts and the holiday season comes into focus. If hiring gains are not as strong as usual, then a drag on hiring could unfold.” He added. 

The September jobs report is to be released by The Labor Department on Friday morning at 8:30 a.m. ET. Let’s look at some of the anticipated statistics: 

  • Unemployment rate: 8.2% expected vs. 8.4% in August 
  • Average hourly earnings, year over year: 4.8% expected vs. 4.7% in August 
  • Average hourly earnings, month over month: 0.2% expected vs. 0.4% in August 
  • Change in non-farm payrolls: +875,000 expected vs. +1.371 million in August 
  • Labor force participation rate: 62.0% expected vs. 61.7% in August 

The anticipated increase in payrolls would stamp the fifth consecutive month of net employment gains.  However, even if there is another increase of 1 million in the payroll gains, US would still be far behind recovering the total rate of unemployment since the month of March and April.  

It is to be noted that only 10.6 million jobs were recuperated in the month of August, whereas employment decreased by more than 22 million back when the pandemic hit. There’s no doubt that the pandemic has left a drastic impact on the labor market, which would take some time to become stable again. 

Despite the improvement in the employment rate since the past few months, the number of permanent layoffs has increased at an alarming rate of 2.1 million since February, as 3.4 million people have found themselves permanently laid off.  

“We’ll be keeping a close eye on the number of permanent layoffs as it is an instructive indicator to help determine the path for the unemployment rate as the economic recovery loses momentum,” included Sam. 

Same was the case with several other labor market indicators as well, which showed that employment is improving undoubtedly, but at a slow rate. Also, the number of permanent layoffs is increasing at a face pace, leaving millions of people worried. 

Due to the slow recovery of labor market, policy makers believe that more efforts have to be made by Washington to help those that have been severely impacted by the pandemic. According to Federal Reserve Chair Jerome Powell the unless the virus is not completely under control, the path ahead remains “highly uncertain.” 

Still efforts are being made by policy and law makers to improve the pace of recovery of the economy from the pandemic.  

 

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