» Job growth slowed further in September.
Job growth slowed further in September, as fading government support and the failure to contain the coronavirus threatened to short-circuit the oncepromising economic recovery.
Employers brought back 661,000 jobs in September, the U.S. Labor Department said Friday. That’s down from1.5 million in August and far below the 4.8 million jobs added in June.
The unemployment rate fell to 7.9 percent, in part because nearly 700,000 people left the labor force.
The monthly report, the last before the presidential election, is the latest sign that the recovery is losing steam.
Government data released Thursday showed personal income fell in August and that consumer spending grewmore slowly as supplemental unemployment benefits expired. Companies including Disney, Allstate and two major airlines recently announced large job cuts.
“It’s disturbing that we’re seeing such a dramatic slowdown in employment gains aswe head into the fall,” said Diane Swonk, chief economist for the accounting firm Grant Thornton. “This is a red flag. We need aid now.”
Even with the recent slowdown, the economy has done better than many forecasters expected in the spring. It has regained just over half of the more than 22 million jobs lost inMarch and April, and the unemployment rate has fallen sharply since it reached a record high of nearly 15 percent in April.
But those early gains largelywere a result of businesses’ reopening and bringing back workers. By now, most businesses that can reopen have done so.
A growing number of businesses are deciding to make permanent job cuts, or to shut down. The number of people reporting they had lost their jobs permanently, as opposed to being on temporary furlough, rose in September.
“We got the easy ones first, and there are not a lot more of those to get,” said Dan North, chief economist for the credit insurance company Euler Hermes North America. “And in the meantime, we’re getting a
lot of permanent job losses.”
Economistswarn permanent losses could worsen if Congress doesn’t provide more aid to households and businesses to replace the programs that expired over the summer.
Prospects for a “Phase 4” spending package improved this week after appearing all but dead in September, but Democrats and Republicans inWashington have yet to reach a deal. If they don’t, the recovery could slow further in October, said AnetaMarkowska, chief economist for the investment bank Jefferies.
“Everything depends on Phase 4 andwhetherwe get that or not,” she said. “There’s no middle ground.”