Today, the jobs report for September indicated that a million fewer workers were unemployed last month as the unemployment rate fell to its lowest post-pandemic level.
The unemployment rate fell to 7.9% last month, but the economy added only 661,000 jobs, missing analysts’ expectations.
The unemployment rates fell for men, women, blacks (including black men and black women), Asians, and Latino men. Latino women and teens saw their unemployment rates tick up.
Job gains occurred in leisure and hospitality, in retail trade, in health care and social assistance, and in professional and business services. These areas reflect continued business reopenings and the resumption of economic activities such as dining out, shopping in person, and medical procedures amidst the pandemic.
We should also note that the number of jobs added in July and August were both revised up significantly–by 145,000 jobs–indicating how much of a boom there was for workers over the summer. Again, this is likely related to more Americans resuming economic activities.
Falling unemployment adds to the other great economic news
This jobs report follows news that 837,000 Americans filed for jobless claims for the first time in the last week, down from 873,000 initial claims in the previous week and lower than expectations.
Some 11.7 million Americans are continuing to file unemployment claims, which has also fallen from the previous week and came in significantly lower than expectations.
Consumers are driving this economic stimulus. Earlier in the week, the consumer confidence index surged in September to the highest level since before the pandemic. The consumer confidence index gauges how consumers feel about the economy and this jump from 86.3 to 101.8 was the biggest one-month increase in 17 years.
An uncertain last quarter
While this jobs report and economic data are positive, the last quarter of the year may be uncertain for many workers.
Major employers in the travel and hospitality industries indicate that they plan to cut jobs this fall as travelers canceled their trips this summer and conferences and events are either going virtual or have been canceled this winter/holiday season. Disney said it will cut 28,000 jobs in its resort business and airlines including American Airlines and United Airlines are planning to cut 32,000 job cuts collectively.
As the temperatures cool, dining outside and other activities will be more difficult, shifting focus to whether states will lift restrictions on indoor activities to help businesses stay afloat. If indoor capacity rules and curfews remain, foot traffic will not be enough to keep many businesses open and may trigger another wave of end-of-year/early 2021 layoffs.
This is the final jobs report before the 2020 election and is an indicator of the economy’s health, which is still among the top 3 issues for voters.
The falling unemployment rate is good for workers who lost their jobs due to the pandemic. It indicates employers are (re)hiring.
However, the big unknown is whether job growth will cool along with temperatures because of tempered economic activity due to the pandemic.
In addition, Congress has failed to rally behind another coronavirus stimulus plan to extend extra unemployment benefits to out-of-work Americans. This report may inject more energy into the discussions.