Oct 4, 2020 - Economy

What's underneath the latest jobs report

Data: Department of Labor; Chart: Andrew Witherspoon/Axios
Data: Department of Labor; Chart: Andrew Witherspoon/Axios

Friday's U.S. nonfarm payrolls report was one of the best jobs growth numbers in history, but taken in context the expected number was abysmal.

  • The U.S. added 661,000 jobs for the month, less than half of the 1.4 million added in August, and a bit more than a third of the 1.7 million added in July.

By the numbers: The U.S. lost around 22 million jobs in March and April and since May has gained back around 11 million.

  • At a pace of 650,000 jobs a month, it would take just under a year and a half for the U.S. to regain the jobs still not replaced.
  • However, data show the pace of jobs growth slowing.
  • And around 100,000 jobs need to be added each month simply to keep up with population growth.

Driving the news: The announcement of potentially hundreds of thousands of layoffs by airlines, insurance and oil giants, fashion companies, and The Happiest Place on Earth this week made headlines, but the number of job losses is on pace with almost every other week over the past five months.

Watch this space: The coronavirus pandemic remains the leading reason for layoffs, but an increasing number of companies are citing other traditional recessionary dynamics as the reason to fire workers.

  • "In September, market conditions caused 45,213 of the announced cuts, followed by 33,713 job cuts due to demand downturn, and 11,562 cuts due to restructuring," Challenger, Gray & Christmas reported last month.

Between the lines: Many of those adding to the number of America's jobless are not counted as unemployed in the jobs report.

  • The biggest difference between the number of people currently collecting unemployment benefits and those on the rolls at the height of the 2007–2009 recession is the Pandemic Unemployment Assistance program, which included 11.8 million beneficiaries as of Sept. 12.
  • Most don't qualify for traditional unemployment benefits and are not counted in the monthly jobs report.

The Pandemic Emergency Unemployment Compensation program, which provides benefits for those who have exhausted traditional unemployment, now includes 1.8 million people.

  • A similar program created during the Great Recession rose to include as many as 5.9 million Americans at its peak.
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