September Unemployment Rate Dips To 7.9% As Wave Of Layoffs About To Hit

The Labor Department reported Friday the September unemployment rate dipped to 7.9% as a wave of layoffs in the airline and other industries were poised to hit. The Bureau of Labor Statistics said 661,000 jobs were added to nonfarm payrolls, about 200,000 less than what economists were expecting.

The announcement comes against the backdrop of coronavirus stimulus talks between Democrats and the White House and tens of thousands of layoffs in the airline industry, tourist, insurance, banking and other industries.

The report attributed the dip in the jobless rate to “resumption of economic activity due to the coronavirus pandemic and efforts to contain it.” Leisure and hospitality, retail trade, healthcare and social assistance, and professional and business services led the way.

“September payroll gains were on the disappointing side, below expectations and well below the pace seen in previous months. The decline in the jobless rate is tainted somewhat by the drop in the labor force participation rate,” Mark Hamrick, senior economic analyst at Bankrate.com, said in an email to International Business Times.

Labor force participation was down 0.3 points to 61.4% while the employment-to-population ratio was 56.6%, off 4.5 points from February.

Labor estimated 7.2 million people had dropped out of the labor force, 2.3 million more than before the pandemic hit. People who wanted a job in September but who were unable to find one numbered 1.9 million while the number of discouraged workers who thought no job was available for them numbered 581,000.

The pandemic was in its 28th week. The number of long-term unemployed, those who have been without jobs for more than 26 weeks, increased 781,000 last month to 2.4 million.

Nobel Prize-winning economist Paul Krugman said the report dealt another blow to President Donald Trump’s hoped-for V-shaped recovery.

Approximately 22.7 percent of those working, 19.4 million people, were working from home, down more than 2 points from August.

The rate was a half-point lower than the August rate and the number of people collecting unemployment benefits fell by 1 million to 12.6 million, the fifth straight month of decline. Before the pandemic hit, 6.8 million people were collecting benefits.

The rate among adult men was 7.4%; among adult women, 7.7%; whites, 7%; Asians, 8.9%; teenagers, 15.9%; Blacks, 12.1%, and Hispanics, 10.3%.

The number of people on temporary layoff increased 1.5 million to 4.6 million, down from 18.1 million in April but 3.8 million higher than February.

A survey by Joblist indicated 31% of those who found a new job are earning less than they did from their previous employer while 38% said they weren’t entirely happy and planned to look for another one.

More than half of jobseekers (58.5%) said they would accept employment at a lower salary, while 58.7% said they would work at a lower level and nearly 72% said they would accept fewer hours. Nearly two-thirds (60%) said they’re working a second job, and only 35% of those who filed for unemployment benefits said they actually got them.