Today, the Bureau of Labor Statistics (BLS) reports an increase of 661,000 jobs in September, representing a notable slowdown in regaining the massive amount of jobs lost during the coronavirus pandemic. As the figure below shows, the economy added 4.8 million jobs in June, followed by 1.8 million in July and 1.5 million in August. The first dose of austerity exhibited by the loss to the vital enhanced unemployment insurance benefit in August is already taking a toll on job creation. At this pace of slowing job growth, it will take years to return to the pre-pandemic labor market.
The slow down is apparent: Monthly change in payroll employment, January 2020–September 2020
|Change in Employment
Source: EPI analysis of Bureau of Labor Statistics' Current Employment Statistics public data series
The U.S. economy is still down 10.7 million jobs from where it was in February, before the pandemic hit. Using average monthly job growth over the year ending February 2020 as the counterfactual, the jobs deficit is easily over 12 million. That’s 10.7 million fewer jobs we have than in February, plus 1.4 million jobs we would have added if the recession hadn’t occurred. Further, nearly a quarter million jobs in September—247,000—were temporary jobs related to the decennial census that will disappear in the next few months.
Today’s report also shows a significant uptick in long-term unemployment, which is defined as an unemployment duration of 27 weeks or more. As the recession has dragged on over the last several months, we have seen workers with longer and longer spells of unemployment. There are now 7.3 million workers unemployed for at least 15 weeks and 2.4 million who are unemployed for 27 weeks or longer. In September, there was a large increase in those with the longest spells of unemployment, up 781,000 in one month. While many of the long-term unemployed are now protected with 13 additional weeks through Pandemic Emergency Unemployment Compensation (PEUC), that provision is set to expire at the end of 2020. At the current slowing rate of job growth and expected continued drag from austerity as federal policymakers fail to act, weakness in the labor market is expected to drag on for years and those workers will be left out in the cold well before they are able to get back on their feet.
In September, we also see a continuation of trends over the last few months: The recovery has been more successful for white workers than Black, Hispanic, or Asian workers. While all groups saw improvement in September, the unemployment rate for Black and Hispanic workers remain significantly higher than for white workers. The unemployment rate for Black workers is now 12.1%, followed by 10.3% for Hispanic workers and 7.0% for white workers. Asian workers saw the biggest drop in unemployment in September of 1.8 percentage points and are at 8.9%.
Unfortunately, the labor market distress is long from over. The economic pain easily extends to over 30 million people in the economy today. That doesn’t include people who had lost their jobs and regained employment but got behind on their bills—or those who lost loved ones and providers to illness. 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 (for instance, here and here) suggest even more trouble on the horizon.
It is a simple fact that the labor market damage would be significantly lessened by vital public health investments and economic relief for today’s workforce as well as state and local governments. There were large losses in the public sector in September, not only because of the decrease of temporary Census workers, but more acutely because of the losses in local K-12 education. Education employment was already suffering prior to the current economy crises. School systems need more, not fewer, resources in these challenging times.
Policymakers must act if there’s any hope for a swifter and more broad-based recovery.