US unemployment lowers slightly to 7.9%

The US economy added 661,000 jobs in the month of September, according to figures released last Friday by the Bureau of Labor Statistics. This brought the unemployment rate down to 7.9 percent from 8.4 percent the previous month. However, this is much lower than the numbers added in previous months, which economists have attributed to a combination of policy interventions expiring and the recession setting in.

Most of the job gains were in previously hit sectors such as F&B, leisure, hospitality, and retail, but these sectors still have not recovered their pre-pandemic numbers. The data shows that employment in food services and drinking places, for example, is still more than 2 million jobs below February levels. Furthermore, large companies such as Disney recently announced major layoffs in the thousands, indicating that job losses in the worst affected sectors are not over.

Gad Levanon, VP of The Conference Board Labor Markets Institute, said that the workforce had expanded faster than expected in previous months, with 52 percent of job losses between February and April since recovered. However, he predicted it will not last.

"We expect the US growth and jobs revivals to continue to decelerate in the coming months as the number of new COVID-19 cases is growing, layoff rates remain high, and weaker government stimulus limit the spending capacity of many households. As long as the risk of contagion remains high, total employment may remain well below pre-pandemic levels. The economy would need to add 5-6 million jobs to return to normal unemployment rates in the 4-5 percent range," he said.

The Bureau of Labor Statistics's figures also showed that the recession is affecting some demographics disproportionately. The jobless rate for Black workers, for example, is 12.1 percent, coming to twice that for white workers (7 percent). The number of long-term unemployed, those unable to find a job for 27 weeks or more, also rose by 50 percent to 2.4 million.