The US economy continues to recover from the devastating effects of the first coronavirus pandemic last spring, but a new case threatens the outlook for sustained growth.
The Labor Department reported Friday that employers added 638,000 jobs in October, a figure that could have been greater if there was no decrease in the number of temporary workers.
But the motivations behind most profits – bars and restaurants, adding 192,000 jobs and retail, raking in 104,000 – represent some of the jobs most at risk due to the resurgence of jobs. case of coronavirus.
Public health experts have linked the return to indoor eating and drinking establishments with an increased number of Covid-19 infections and these businesses face new constraints in the wake of an outbreak. more important. Colder temperatures have limited outdoor dining, a lifesaver for restaurants in many parts of the country.
Similarly, if consumers are afraid to stay away from shopping malls, hiring retail staff could be cut as the year-end shopping season approaches.
According to Daniel Zhao, senior economist at job site Glassdoor, job open rates are weaker than expected as retailers prepare for the holiday season. “This could lead to more limited recruitment and spending,” he said. And despite recent achievements, employment in the hospitality and entertainment sectors and among retailers is far below the pre-pandemic prevalence.
However, there is a notable bright spot in the October report: the unemployment rate fell from 7.9% to 6.9%.
“It’s better than expected, but we’re starting to see the opposite,” said Diane Swonk, chief economist at accounting firm Grant Thornton in Chicago. “The declining unemployment rate is good news, but still more than 11 million workers are unemployed.”
After a sharp increase in the third quarter, economic growth slowed down as federal relief measures were enacted when the pandemic began to expire. The prospect of another aid round has blurred with Democrats and Republicans contradicting the size of the package.
The Labor Department report also highlights the uneven nature of the pandemic-induced recession and the subsequent recovery, in which wage earners are much inferior to manual workers. high job.
In October, the high school graduate unemployment rate was 8.1%, while the university graduate unemployment rate was 4.2%.
“Low wage earners have been eliminated,” said Ms Swonk. “They run the risk of falling among the poorest.”
Indeed, even when the unemployment rate drops, unemployment for many people will last longer. The labor ministry said the number of long-term unemployed people – those without a job for 27 weeks or more – rose to 3.6 million in October, up 1.2 million.
One-third of all unemployed workers are currently in the long-term, highest proportion since 2014. That could also cause trouble ahead, because long-term unemployed people are often hard to find. more jobs even when there are jobs.
What’s more, the government reported that the number of people accepting part-time jobs because full-time jobs were not available increased by 383,000, to 6.7 million, a sign of growing despair.
Millions of unemployed workers have had a harder time paying their bills since an emergency federal program offering $ 600-a-week additional benefits expired in late July. Another series of federal unemployment benefits will last until the end of the year.
The Institute of Economic Policy, a left-wing research group, estimates that more than 30 million workers have lost their jobs or had reduced hours or reduced wages during the coronavirus-related recession.
With the Senate still in the hands of the Republican Party, as the election results show, any further bailout could be more modest than the millions of dollars that seemed likely to happen if the “green wave” gave the Democrats control over Congress and the White House. As a result, Carl Tannenbaum, chief economist at the Northern Trust in Chicago, has cut his growth estimate for the coming year by a full percentage point.
“The good news is that the US job market is recovering,” said Tannenbaum. “But it may take a while to fully recover.”
Unemployed Americans are slowly returning to the job market, with the workforce growing 724,000 in October. The employment-to-population ratio, the proportion of adults working, has risen to 57.4 percent. from 56.6% in September – although still far below the 61.2% recorded a year earlier.
Nicole Zappone of Naugatuck, Conn., Is one of the lucky ones, having returned to work in August after six months unemployed.
Ms. Zappone, 30, who has read novels by James Patterson and Michael Connelly, said: “It was the worst period of my life. “I have been working since the age of 14 and this is the first time I have been fired. And it’s hard to understand. “
In previous years, she worked in a consignment and babysitting store and walked dogs for walks. Finding a job has never been difficult – until now.
Indeed, when she was offered a job as a replacement teacher in Waterbury, Conn., In March, she did not know how serious the impact of the virus would be and how severe the subsequent closing would be. During the summer, she applied from job to job on Indeed.com without any response.
“I felt like a failure, even though I knew it was out of my control,” she said. “I can’t tell you how many jobs I’ve applied for.”
When she was hired by a local information technology company to work in public relations, she couldn’t believe her luck. A week after the phone interview, she was recruited into a 20-hour-a-week position she hopes to become full-time. She is working from home and only comes to the office once – to sign a contract.
“I like it,” she said. “I can use my passion to write and talk to people from all over the country.”
For others, getting the job back is an even bigger challenge.
Jodi Jackson, 57, worked as a buyer for JC Penney at the company’s headquarters in Plano, Texas, until she was laid off in April 2019. She looked for work as a shopper at other chains are unsuccessful. And she considered moving into another field.
“I could do the sales and I tried to convert, but unless you know someone, it’s very hard to get an interview,” said Ms. Jackson.
“I was born to be a shopper,” she added. “I will buy screws and nails for Home Depot at this point.”
Ms. Jackson worked for the Census Bureau for three months, but that job ended last month. “I don’t live beyond my means,” she said. She sold her apartment in Ann Arbor, Mich., Before moving to Plano in 2019, she said, and mostly lived off the proceeds of that sale. (She got unemployment benefits after JC Penney was fired and is able to do so again based on her job loss in the census.)
She temporarily took a job as a cashier at Macy’s during the peak holiday season last year. “That’s just $ 9.45 an hour, a fraction of what I earn at JC Penney,” she said. “But I want to work and be with everyone. And retail is what I know.
Ms. Jackson excluded another holiday at Macy’s because the salary was too low. And despite the growing problems of the industry, she hasn’t given up hope yet. On Wednesday, a retailer based in Plano asked her to come for a third interview next week.
“I feel really positive,” she added. “I’ll get a job.”
Jeanna Smialek contributed to the report.