Job gains don’t paint a clear picture of the recovery
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The U.S. economy added a seasonally adjusted 661,000 jobs in September, the Labor Department announced Friday. The unemployment rate is down to 7.9%. That’s not bad news.
But it’s far less impressive than the gains we’ve seen in earlier months, which means that this is where the hard part starts in this recovery.
You can thank Rebecca Hamilton for some of those 661,000 jobs that were created last month. Hamilton is CEO of W.S. Badger, which makes organic skincare products and sunscreen in New Hampshire.
“We have been hiring,” she said. “The future is very uncertain, but sales continue to be very strong for us.”
But the 661,000 net jobs created obscures the fact that 345,000 jobs were lost permanently.
“It’s really tough to be a bar owner right now. We closed our doors on March 17, and we haven’t been able to open them since,” said Zack Medford, a bar owner in Raleigh, North Carolina.
He said more and more bars are shutting down for good. Across the United States, job hiring is slowing down, and layoffs and bankruptcies are still with us.
“Businesses that initially hung on for a while are realizing they have to downsize or even capitulate,” said Seth Carpenter, chief U.S. economist at UBS.
It’s not just small businesses. United and American airlines are laying off 32,000 people, and that’s just two companies. Carpenter said state and local governments are also starting to let people go, especially in education.
Jason Furman, professor of economic policy at Harvard, has another concern.
“Millions of people have left the workforce,” he said.
Exactly 4.4 million have at this point in the pandemic given up looking for work, he said. This is bad, because that exodus, that form of hopelessness, is really hard to undo.
“After the Great Recession, to get people back into the labor force who had given up and left ’cause of the Great Recession, that process wasn’t even complete at the beginning of 2020 more than a decade into the economic recovery,” he said.
So it appears that we’ll be digging out from this for a while.
COVID-19 Economy FAQs
So what’s up with “Zoom fatigue”?
It’s a real thing. The science backs it up — there’s new research from Stanford University. So why is it that the technology can be so draining? Jeremy Bailenson with Stanford’s Virtual Human Interaction Lab puts it this way: “It’s like being in an elevator where everyone in the elevator stopped and looked right at us for the entire elevator ride at close-up.” Bailenson said turning off self-view and shrinking down the video window can make interactions feel more natural and less emotionally taxing.
How are Americans spending their money these days?
Economists are predicting that pent-up demand for certain goods and services is going to burst out all over as more people get vaccinated. A lot of people had to drastically change their spending in the pandemic because they lost jobs or had their hours cut. But at the same time, most consumers “are still feeling secure or optimistic about their finances,” according to Candace Corlett, president of WSL Strategic Retail, which regularly surveys shoppers. A lot of people enjoy browsing in stores, especially after months of forced online shopping. And another area expecting a post-pandemic boost: travel.
What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?
Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”
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