Economy Adds 661,000 Jobs, Unemployment at 7.9%

People wearing face masks line up outside a job center in Pearl, Miss., on Aug. 31, 2020. (AP Photo/Rogelio V. Solis, File)

(CN) — Employers added back just 661,000 jobs to the U.S. economy in September while unemployment dropped slightly to 7.9%, the highest recorded jobless rate heading into a presidential election.

The Labor Department report released Friday is the last before the Nov. 3 election and shows the third straight month of a slowdown in economic recovery from the Covid-19 pandemic.

The 661,000 jobs recovered last month is less than half of the revised 1.5 million jobs added back in August. By comparison, American businesses added 1.8 million jobs in July and 4.8 million in June.

The economy has recovered only about half of the roughly 22 million jobs lost in March and April, when the pandemic closed businesses across the country and forced people to stay at home.   

Down from 8.4% in August, the 7.9% unemployment rate is still the highest ahead of a presidential election since the government started keeping official track in the 1940s.

“Don’t let the headline numbers fool you. This report is bad,” said Nick Bunker, economic research director at Indeed Hiring Lab. “The economy may have added jobs, but at a pace way too slow considering how many jobs were lost earlier this year. The unemployment rate may have dropped, but the share of people with a job only moved up slightly.”

He added, “This report is an illusion of progress at a time when we needed accelerating gains in the labor market.”

The jobs report was released just hours after President Donald Trump and First Lady Melania Trump tested positive for Covid-19, rattling stock markets less than five weeks before Election Day.

Elise Gould, senior economist at the Economic Policy Institute, warned that at this pace, it could take years for the economy to return to pre-pandemic levels.

“Unfortunately, the labor market distress is long from over,” she wrote. “The pandemic continues to spread, including into the White House, and may worsen in the winter months along with increasing numbers of evictions. Further, recent reports of impending layoffs…suggest even more trouble on the horizon.”

The Walt Disney Company announced Tuesday that it is laying off 28,000 theme park workers due to closures from the novel coronavirus, and tens of thousands of airline workers are set to lose their jobs when federal aid for that industry runs out this month.

The leisure and hospitality industry, which includes restaurants and bars hit hard by pandemic closures, recovered 318,000 jobs in September, accounting for about half of last month’s gains. However, employment at food and drinking establishments is still down by 2.3 million compared to February levels.

Retail trade added back 142,000 jobs last month, while the health care and social assistance sector recovered 108,000 and professional and business services gained 89,000.

Bunker said the durability of recent job gains in the leisure and hospital sector is uncertain heading into the fall and winter. He also noted the number of permanently unemployed people is on the rise.

“This report is massively concerning,” he wrote. “We are not where we need to be, nor are we moving fast enough in the right direction as we head into fall.”

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