Unemployment plunges as the pandemic continues
Here's the good news for workers: The unemployment rate fell by a full percentage point to 6.9% last month — in the face of rising coronavirus cases, continued pressure on businesses, and no economic relief in sight from the government.
The bad news: That rapid snapback in employment after initial economic lockdowns eased is over. Job growth has slowed every month since June.
Between the lines: The labor market is still 10 million jobs short of where it was before Covid-19 wrecked the economy.
- What they're saying: "We need bigger than this, and for many months, just to get out of the hole that we're in," Austan Goolsbee, an economics professor at the University of Chicago's Booth School of Business, told CNBC this morning.
The dynamic at play: “There’s fewer jobs for people to go back to at the same time we have a lot more people unemployed,” Eliza Forsythe, an economics professor at the University of Illinois Urbana-Champaign, tells Axios.
By the numbers: The number of long-term unemployed (out of a job for over 6 months) rose by 1.2 million to 3.6 million — a troubling sign because the longer you're out of work, the more difficult it is to get a job.
- "That holds down the whole economy," Fed chairman Jerome Powell told reporters on Thursday.
- But, but, but: The number of people who said they couldn't look for work because of Covid-19 fell last month to 3.6 million from 4.5 million.
- Plus: Workers came back into the labor force last month, reversing the trend of people giving up looking for work in September.
What to watch: With Joe Biden edging closer to a win in the presidential race, he could be inheriting a labor market that's improving but desperately needs support.
- There's need to pass a new stimulus package through what is shaping up to be a divided Congress, with prospects that the economy and job market might get worse in the interim.
- The desperation for state and local government aid is right there in the numbers: They're shedding thousands of jobs. That held down the overall payroll gain.
The bottom line: The U.S. labor market is recovering better than anybody had dared to hope in the face of a deadly pandemic infecting 100,000 new people every day.
- But it’s still far from healthy, and will only get there once the coronavirus is brought under control.