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Tag: unemployment

  • US Labor Market Faces Slowdown Amid Government Shutdown Uncertainty

    US Labor Market Faces Slowdown Amid Government Shutdown Uncertainty

    Private payrolls in the US took a significant hit in September, adding complexity to an already uncertain economic landscape. With the government shutdown halting the release of the Bureau of Labor Statistics’ (BLS) monthly jobs report, policymakers and investors are left grappling for insights into the labor market’s health. In the absence of official data, attention has turned to alternative sources, such as the private-sector jobs report from payroll processor ADP, released on October 1.

    According to ADP, US private-sector businesses shed 32,000 jobs in September, a stark contrast to economists’ expectations of a 50,000-job gain. The report also revised August’s figures, turning an initial estimate of 54,000 jobs added into a loss of 3,000. ADP’s chief economist, Nela Richardson, attributed much of this downturn to a preliminary “rebenchmarking” of the data, which reduced September’s job count by 43,000 compared to pre-benchmarked figures. “While the numbers changed, the story remains consistent: hiring momentum has slowed throughout 2024,” Richardson told reporters. She noted that the recalibration, aligned with the 2024 Quarterly Census of Employment and Wages (QCEW), revealed a persistent slowdown in hiring, particularly evident in September. The QCEW, which draws from quarterly tax reports submitted by businesses, offers a comprehensive view of employment and wages at state, regional, and county levels. However, its lagged data limits its timeliness, leaving gaps in real-time analysis.

    September’s job losses were driven primarily by small businesses, with widespread declines across industries. Professional and business services, as well as leisure and hospitality, saw some of the largest drops. Health care remained a notable exception, continuing to drive consistent employment growth throughout the year. The broader labor market is showing signs of stagnation. The BLS’s August jobs report, the last available before the shutdown, indicated that the economy added just 22,000 jobs, with the unemployment rate climbing to 4.3%—its highest in nearly four years. June’s job gains were also revised downward into negative territory. The BLS’s Job Openings and Labor Turnover Survey, released earlier this week, further underscored the slowdown, with the hiring rate dropping to 3.2% in August, matching its lowest level since 2013, excluding the early pandemic period in 2020.

    Despite the lack of a monthly BLS jobs report, economists argue that the Federal Reserve has enough evidence to justify further interest rate cuts at its next meeting. Joe Brusuelas, an economist at RSM US, noted that the labor market’s condition supports a quarter-point rate reduction. He highlighted additional pressures, including policy uncertainty around trade and immigration, as well as long-term demographic challenges limiting labor supply. “The government shutdown and threats of mass firings are not conducive to a positive October payroll outlook,” Brusuelas wrote. US stocks reflected this uncertainty, trending lower amid concerns over the shutdown and remaining subdued after the ADP report’s release.

    While ADP’s data is not always a reliable predictor of the BLS’s official numbers, it remains a key indicator of labor market trends, particularly in the current data vacuum. Economists had anticipated a rebound in September, with forecasts of 50,000 jobs added and a steady unemployment rate of 4.3%. However, the ADP report paints a bleaker picture, reinforcing concerns that the US labor market is at risk of stalling.

    As the government shutdown persists, the absence of comprehensive data will continue to challenge policymakers and investors alike, making reports like ADP’s a critical, if imperfect, tool for navigating the economic landscape.

  • US Economy Adds 379,000 Jobs In February, Unemployment Drops To 6.2%

    US Economy Adds 379,000 Jobs In February, Unemployment Drops To 6.2%

    The US Economy added 379,000 jobs in February, roundly beating economists’ estimates of 210,000, and indicating that one year into the Coronavirus pandemic, the labor market is finally showing signs of recovery. In the first full monthly employment report under President Joe Biden, the unemployment rate fell to 6.2 percent, from 6.3 percent in January, according to data released Friday by the Bureau of Labor Statistics. “The ship is pointed in the right direction, and the additional stimulus coming from Congress should be the wind in the sails to get the economy back on track,” said Charlie Ripley, Senior Investment Strategist for Allianz Investment Management. The latest jobs report comes after a month of stumbles in the Coronavirus vaccine deployment and frigid weather that plunged Texas and large parts of the South into a deep freeze that froze oil rigs, ruptured household plumbing, and cost lives. The January jobs report, which showed just 49,000 jobs were added, was revised upwards on Friday to 166,000. Although the economy has been adding jobs, those gains mask the extent to which the labor market is still being held back, and the number of people who have been sidelined for a diverse array of reasons, from child care obligations to health concerns to a lack of job opportunities in fields still devastated by the pandemic. 

    Although monthly job gains have surged and ebbed wildly over the past year, an overarching pattern of slowing employment gains worries labor market observers. “The unemployment rate itself is a bad descriptor of the current labor market conditions,” said Andrew Stettner, a senior fellow at the Century Foundation. Dan North, chief economist, North America at Euler Hermes, said that although nearly 60 percent of the jobs lost since the onset of the pandemic have been recovered, the labor force participation rate shows another story. “When you go and look at the participation rate, we’ve recovered about 41 percent of what was lost — so it is slower,” he said. The discrepancy arises because of how the government tallies who has a job, and who is actively looking for a job. People are not captured by the official unemployment rate if they have dropped out of the labor force. “There’s a lower participation rate because people have left. That’s the disconnect,” North said. Federal Reserve Chair Jerome Powell said last month that the nation’s real unemployment rate is closer to 10 percent, and the flagging labor force participation rate, which was 63.4 percent in February 2020, when unemployment was at just 3.5 percent, reflects that.

    While college-educated people lost proportionately fewer jobs over the course of the pandemic and have regained more of them, people who graduated high school but never obtained a college degree have not been so lucky. “Lower-paid workers, lower-educated workers … they’ve been left behind. They’ve got skills that haven’t been developed, and we’re all less wealthy because of that,” said Bob Phillips, co-founder of Spectrum Management Group. Women, and particularly young women, have lost ground, an observation noted by the Fed’s Powell as well as other officials as a stumbling block that could impede a broader economic rebound. “Women are staying at home because of the school situation, so that is a really significant change that Covid has brought about and will probably stick with us for a while, I think — schools are only slowly opening up,” North said.

  • US Economy 1.4 Million Jobs In August, Unemployment Rate Drops To Single Digits

    US Economy 1.4 Million Jobs In August, Unemployment Rate Drops To Single Digits

    The US Economy added around 1.4 million jobs last month, reflecting a slow return to labor market growth, according to data released on September 4 by the Bureau of Labor Statistics. The unemployment rate fell into the single digits for the first time since the Coronavirus pandemic began, dropping from 10.2 percent to 8.4 percent (still the highest rate since 2011), the monthly report showed. Before the coronavirus’ stranglehold on the economy, the rate was at 3.5 percent, the lowest since 1970. “Great Jobs Numbers!” President Donald Trump Tweeted after the numbers were released. “1.37 Million Jobs Added In August. Unemployment Rate Falls To 8.4% (Wow, much better than expected!). Broke the 10% level faster and deeper than thought possible.”

    The August data indicates a halting recovery of the more than 22 million jobs lost since March, with July’s revised total of 1.73 million gains and June’s addition of 4.8 million positions. “We have had three huge months of job gains, but so far have regained less than half of the losses in March and April,” said Dan North, senior economist at Euler Hermes North America. “Job gains so far have probably been the easy ones to get, where a business opened back up and brought back in its employees.” The payrolls report is the first one issued since the CARES Act expired, along with its $600 in additional weekly unemployment benefits. Lawmakers continue to debate the finer points of a further coronavirus fiscal aid package, with some Republicans expressing concern that the “generous” unemployment stipend acts as a deterrent to those who would otherwise be attempting a return to the workforce. The Federal Reserve noted in its most recent Beige Book on economic conditions that businesses who were looking to add employees found “day care availability, as well as uncertainty over the coming school year and jobless benefits” were the main factors impeding rehirings.

    The August jobs snapshot comes on the heels of a decline in weekly initial jobless claims that showed 881,000 people filed for first-time unemployment benefits last week. While down from the Coronavirus pandemic peak of almost 7 million, it still indicates an elevated level far above the previous average of 200,000 claims a week. Layoff announcements have ramped up in recent days, with airlines warning of tens of thousands of layoffs as government aid expires, and Paycheck Protection Program funds dwindle for many business owners. The sluggish pace of economic recovery hit the stock market after a slew of disappointing economic data sparked a sell-off that included many of the highly valued tech stocks that have driven the market to multiple record highs since the pandemic began. Apple alone lost $180 billion on September 3, the biggest one-day loss on record for any company. In addition to the jobs report, the Labor Department issued a projection that the pace of job gains over the next decade would slow considerably, predicting that just 6 million new jobs would be created during the period of 2020-29. While that growth rate does not include the impact from the coronavirus, it does note that the virus is likely to create “new structural changes to the economy.”

  • OurWeek In Politics (August 5, 2020-August 12, 2020)

    OurWeek In Politics (August 5, 2020-August 12, 2020)

    Here are the main events that occurred in Politics this week:

    1. 2020 Election: Joe Biden Selects Kamala Harris As Running Mate

    Democratic nominee Joe Biden selected California Senator Kamala Harris as his running mate this week.

    Joe Biden has selected California senator Kamala Harris as his Vice-Presidential running mate, a historic choice he believes will bolster his chances of beating Donald Trump in an election year shaped by the Coronavirus pandemic and a national reckoning on race. Senator Harris, Biden’s one-time presidential rival and a barrier-breaking former prosecutor, is the daughter of immigrants from Jamaica and India and is the first African-American woman and the first Asian-American to be nominated for a major party’s presidential ticket. “I have the great honor to announce that I’ve picked Kamala Harris – a fearless fighter for the little guy, and one of the country’s finest public servants – as my running mate,” Biden wrote on Twitter. In a tweet, Harris said she was “honored” to join Biden on the Democratic ticket and pledged to “do what it takes to make him our Commander-in-Chief”. Biden announced his selection in a text and email message to supporters. His campaign said the two would hold their first event together on August 12, in Biden’s home town of Wilmington, Delaware.

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    2. President Donald Trump Signs Four Executive Orders Providing Economic Relief Amid Coronavirus Pandemic

    Amid a breakdown in congressional negotiations, President Donald Trump signed several executive orders this week providing economic relief amid the Coronavirus pandemic.

    At his Bedminster, New Jersey golf resort on August 8, President Donald Trump signed four executive actions to provide economic relief amid the coronavirus pandemic. The actions amount to a stopgap measure, after failing to secure an agreement with Congress. The three memorandums and one executive order called for extending some enhanced unemployment benefits, taking steps to stop evictions, continuing the suspension of student loan repayments, and deferring payroll taxes. President Trump promised that funds would be “rapidly distributed” to Americans in need, although it remains unclear whether the president has the authority to do certain steps unilaterally, without congressional approval. In any case, legal challenges are expected, which could delay any disbursement of funds. 

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    3. July Jobs Numbers Reveal Mixed Economic Outlook

    The July jobs report, which was released this week, revealed a still weakened US economy reeling with the Coronavirus pandemic and an uneven recovery.

    The US economy added another 1.8 million jobs in July, a sharp slowdown from June and a small step for an economy that is still down almost 13 million jobs since the start of the Coronavirus pandemic. It was the third straight month of improvement after the spring lockdown that decimated the labor market, and the July job gain exceeded economists’ expectations. Even so, it was far fewer than the 4.8 million jobs added in June. The unemployment rate fell to 10.2%, the Bureau of Labor Statistics reported August 9 but remains above the recent highs of 10% that were recorded in November of 1982 and October of 2009.

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    4. 2020 Election: NAACP Announces Initiative to Boost African-American Voter Turnout in Key Swing States

    The NAACP this week annoucned a major voter registration initiative ahead of the 2020 Presidential election.

    The NAACP, the largest US civil rights organization, is launching a drive ahead of November’s presidential election to boost African-American voter turnout in six key states, it said on August 12.  The initiative aims to enlist the services of about 200,000 “high-propensity” African-American voters, or people who turned out to vote in a high number of recent local, state and presidential elections.  Those voters, in turn, will seek to mobilize so-called “low-frequency” African-American voters, people who were registered to vote, but who had not voted in the most recent election cycle or several election cycles, in Florida, Georgia, Michigan, North Carolina, Texas, Pennsylvania, and Wisconsin, all competitive states in the 2020 Presidential election that recently saw Joe Biden leading in the polls. The goal is to increase African-American turnout by more than 5% compared to 2016. That year, African-American voter turnout declined to its lowest level since 1996, according to the Pew Research Center. “We’ve seen the outcome of when we have a drop in voter activity in the Black community,” said NAACP President Derrick Johnson.  “We have racism germinating from the White House,” he said, stressing the urgency of getting African American voters to the polls. 

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  • July Jobs Numbers Reveal Mixed Outlook For US Economy

    July Jobs Numbers Reveal Mixed Outlook For US Economy

    The US Economy added another 1.8 million jobs in July, a sharp slowdown from June and a small step for an economy that is still down almost 13 million jobs since the start of the Coronavirus pandemic. It was the third straight month of improvement after the spring lockdown that decimated the labor market, and the July job gain exceeded economists’ expectations. Even so, it was far fewer than the 4.8 million jobs added in June. The unemployment rate fell to 10.2%, the Bureau of Labor Statistics reported August 9 but remains above the recent highs of 10% that were recorded in November of 1982 and October of 2009.

    Overall, the most recent jobs report presented a mixed picture, and economists are still trying to come to grips with how the labor market is behaving in this unparalleled situation. For example, the number of people working part-time rose by 803,000 to 24 million in total in July. The government defines part-time work as anything under 35 hours per week. “We added more jobs than most people expected, but the gains really were disproportionately part-time workers,” said Kate Bahn, economist, and director of labor market policy at the Washington Center for Equitable Growth. “To me that means even if workers are coming back it’s to jobs that pay less, and families will be worse off.” Meanwhile, the unemployment rate fell in all demographic groups. The rate remains by far the highest for Black workers at 14.6%, which is concerning, Bahn said. “Research from previous downturns suggests that Black workers are the most likely to be displaced,” she added. Then there are seasonal adjustments, which are based on historical trends in the job market, but because the pandemic is unlike any other moment in history, they are distorting the data at the moment. Without seasonal adjustments, only 591,000 jobs were added in July.

    One positive sign in this jobs report is the number of permanent job losses: it was more or less flat from June at 2.9 million. This might not sound exciting, but it would have been very bad news for the recovery had the number gone up. “Granted still more than double from before the crisis, but we’ll take the one-month reprieve,” said Daniel Zhao, senior economist at Glassdoor. Since the Coronavirus pandemic hit, the government has struggled to count the enormous number of people who are out of work. That’s in part because it has been increasingly difficult for workers themselves to discern whether they have been temporarily laid off or employed but not at work. The share of misclassified responses was smaller in June and July than in the months before, the BLS said. Including the misclassified workers, the July unemployment rate would have been about one percentage point higher than reported.

    The reopening of the economy and a resurgence in Coronavirus infections in some states, paired with business and individuals running out of federal aid, has created a unique set of conditions for the jobs market. A survey from Cornell University showed that 31% of workers who were recently rehired have lost their jobs for a second time during the pandemic. Another 26% have been told that they might get laid off again. Meanwhile, the Federal Reserve Bank of St. Louis said states with more Coronavirus cases since June also registered the weakest employment recovery. This was most notably true for Arizona, Florida, California, and Texas.

    The August 9 jobs report comes during tense times in Washington, as Republicans and Democrats are butting heads over the next stimulus bill. One point of contention is the government’s boost of unemployment benefits. The CARES act provided a weekly boost of $600 to regular jobless aid. But this provision ran out on July 31. Now Congress is arguing about how to proceed: Democrats want to keep the $600 weekly supplement for the rest of the year, while Republicans want to cut it to $400 a week. For millions of Americans, the benefit expansion contributes a large portion of their income at the moment, so cutting it could hamper the recovery. At the same time, some economists believe that too much unemployment aid actually keeps people from returning to work. The question is what is too much aid during an economic crisis of unprecedented proportions.

  • US Economy Adds Record 4.8 Million Jobs In June

    US Economy Adds Record 4.8 Million Jobs In June

    The US economy added a record 4.8 million jobs in June, according to federal data released on July 2, but a surge in new Coronavirus infections and a spate of new closings threatens the nascent recovery. Two key federal measurements showed the precarious place the economy finds itself in three and a half months into the pandemic as the country struggles to hire back the more than 20 million workers who lost their jobs in March and April. While companies have continued to reopen, a large number of Americans are finding their jobs are no longer available. The unemployment rate in June was 11.1 percent, the Bureau of Labor Statistics said, down from a peak of 14.7 percent in April but still far above the 3.5 percent level notched in February. And another 1.4 million Americans applied for unemployment insurance for the first time last week and more than 19 million people are still receiving unemployment benefits, stubbornly high levels that show how many people are struggling to find or keep work. The Congressional Budget Office said the Coronavirus pandemic gave such a shock to the labor market that it would not fully recover for more than 10 years.

    President Donald Trump touted the jobs that were added at a news conference called shortly after they were released, saying they were a sign that “America’s economy is now roaring back to life like nobody has ever seen before.” “All of this incredible news is the result of historic actions my administration has taken,” President Trump said. But his top aides acknowledged there was still a long way to go. “There is still a lot of hardship, and a lot of heartbreak, in these numbers,” National Economic Council Director Larry Kudlow said. “I think we have a lot more work to do.” The stock market initially rose on the news, with the Dow Jones industrial average rising 400 points, or 1.5 percent, before retreating. It closed up 92 points on the day.

    Economists called the 4.8 million jobs added encouraging, saying they were a sign that the massive financial incentives that Congress passed appeared to have succeeded at stanching even greater job loss. But the good news came with a couple of significant asterisks: It was gathered the week of June 12, when the country was reporting less than 25,000 new cases a day, not the current average of more than 40,000 that has sent new closures and shutdowns cascading across states and counties. “The pandemic pushed us into a very deep economic hole,” said Mark Zandi, chief economist at Moody’s Analytics. “We can certainly fall back.” The more than 14.7 million people who are still out of work have left the country with an unemployment rate higher than any point during the Great Recession. The unemployment insurance data, based on statewide claims that are separate from the survey that informs the jobs report, paints an even less sanguine picture: Last week was the 15th straight where unemployment claims exceeded 1 million, a sign that the economic recovery has not taken hold for many Americans.

    The data bring into sharper focus the turmoil facing the US economy after many businesses sent workers home in March during the beginning of the spike in deaths caused by the virus. Many companies began rehiring in May and June, but there are signs that some workers are getting laid off for the second time in just a few months. Many Americans remain employed but are working drastically reduced schedules, more than 9 million workers reported working part-time because of economic reasons, more than double the level in February before the pandemic. Still, a participation rate of 61.5 percent in June, slightly up from April and May but nearly a percentage point below February, indicates that others may be leaving the labor force altogether, an echo of the deep economic turbulence in the Great Recession. Economists said there are other reasons to be concerned as incentives for businesses to retain employees and some benefits that have allowed people out of work to stay afloat financially are winding down without more federal action.

    Federal and state officials struggled to time their reopening efforts in April and May, in some cases ignoring warnings from public health officials. Now, cases in some of the states that reopened the fastest, or with the loosest restrictions, are seeing the biggest spikes, such as Florida, Arizona, and South Carolina. In recent days, Texas shut down all bars just weeks after they had reopened. California announced the closure of bars and indoor dining in 19 counties, more than 70 percent of the state. And at least nine other states have slowed or reversed their reopenings. Restaurant bookings have begun to sink in hard-hit states such as Florida, Texas, and Arizona. Job postings on the Indeed website, though up from a low of 39 percent, are still down 24 percent from last year.

  • US Unemployment Rate Declines By 2.5 Million In May

    US Unemployment Rate Declines By 2.5 Million In May

    The American economy defied forecasts for a Depression-style surge in Unemployment this week, signaling the economy is picking up faster than anticipated from the coronavirus-inflicted recession amid reopenings and government stimulus. A broad gauge of payrolls rose by 2.5 million in May, trouncing forecasts for a sharp decline following a 20.7 million decrease during the prior month that was the largest in records back to 1939, according to Labor Department data released on June 5. The figures were so astonishing that President Donald Trump held a news conference, where he called the numbers “outstanding” and predicted further improvement before he is up for re-election in November. While the overall picture improved, there remain several underlying issues facing the economy. For example, 21 million Americans remain unemployed with a jobless rate higher than any other time since 1939, indicating a full recovery remains far off with many likely to suffer for some time. And the return to work is uneven, with unemployment ticking up among African Americans to 16.8%, matching the highest since 1984, even as unemployment rates declined among white and Hispanic Americans. That comes amid nationwide protests over police mistreatment of African-Americans, which have drawn renewed attention to race-based inequality.

    The latest figures may give a boost to President Donald Trump, who has siginficantly fallen behind Democratic challenger Joe Biden in polls amid dissatisfaction with his response to the pandemic and the death of George Floyd. The numbers could also reduce pressure on policy for another round of fiscal support, with Democrats and Republicans at odds over the timing and scope of new measures following record aid approved by Congress. “The only thing that can stop us is bad policy, like raising taxes and the Green New Deal,” President Trump said on June 5. He also said that he will ask Congress to pass more economic stimulus, including a payroll tax cut.

    One caution noted by the US Labor Department is that the unemployment rate “would have been about 3 percentage points higher than reported,” so 16.3% if data were reported correctly, according to the agency’s statement. That refers to workers who were recorded as employed but absent from work due to other reasons, rather than unemployed on temporary layoff. The broader U-6, or underemployment rate, which includes those who have not searched for a job recently or want full-time employment, fell only slightly to 21.2% in May from 22.8%, which is its highest rate since 1982. In February, it was 7%, with the main unemployment rate at a half-century low of 3.5%.