Private sector adds 135,000 jobs in September, spurring fears of economic slowdown

US economy adds a disappointing 661,000 jobs last month in final employment report ahead of Election Day

Private sector adds 135,000 jobs in September, spurring fears of economic slowdown

A resurgence of coronavirus cases in the United States is having a plateau effect on the economic recovery. The July 2020 jobs report from the government shows the pace of hiring has slowed significantly after a short-lived rebound in the spring. (Aug 6) AP Domestic

U.S. employers added a disappointing 661,000 jobs in September as Sunbelt states resumed business reopenings that were disrupted over the summer by COVID-19 spikes.

The gains offset persistent layoffs at businesses that have exhausted federal aid.

The unemployment rate fell to 7.9% from 8.4% in August, the Labor Department said Friday. But that's because the labor force — which includes people working and looking for jobs — shrank by about 700,000.

Economists surveyed by Bloomberg had estimated that 870,000 jobs were added last month.

In this photo taken Thursday, June 4, 2020, a pedestrian wearing a mask walks past reader board advertising a job opening for a remodeling company, in Seattle. (Photo: Elaine Thompson, AP)

The jobs report is the last before a Nov. 3 presidential election that could serve as a referendum on President Trump’s handling of the pandemic and its economic fallout. Overall, the economy is still recouping jobs in outsize fashion after shedding a record 22.1 million in early spring but the recovery is slowing, raising the specter of a deficit that could take several years to close.

September marks the third straight monthly pullback in payroll gains after employers added a record 4.8 million in June, 1.7 million in July and 1.5 million in August. All told, the nation has clawed back 11.4 million jobs, slightly more than half the total wiped out as states shut down nonessential businesses and Americans avoided travel and public gathering spots contagion fears.

“The slowing momentum in the labor market bodes poorly for the broader recovery and points to increasing scarring effects from the crisis,” economist Kathy Bostjancic of Oxford Economics wrote in a note to clients.

Kent Syler, a political scientist at Middle Tennessee State University, said the disappointing jobs report could damage Trump’s chances for re-election.

“Managing the economy is one of the few areas where polling favors President Trump,” Syler said. “Any sign that the recovery is weakening could cost him that already narrow advantage. The lack of a stronger jobs report is also a lost messaging opportunity for the Trump campaign on a day when they could have used some good news. “

Several factors held down job gains last month.

Janitors and other school staffers didn’t return to work as usual last month because of remote learning in many regions, leading to 231,000 local government education losses on a seasonally adjusted basis, according to Labor figures and a Goldman Sachs analysis. Plus, the research firm says, parents who can’t get child care may not be able to work.

And federal government payrolls fell by 34,000 as temporary workers brought on for the 2020 Census were let go. The private sector added a sturdier 877,000 jobs.

At the same time, states have been reopening in phases and some in the South and West that halted those plans are now easing restrictions, Goldman Sachs says, potentially paving the way for hundreds of thousands of job gains. San Francisco, for example, allowed limited indoor dining this week following similar moves in some California counties weeks ago.

Such steps mean many employees furloughed by restaurants, shops and movie theaters are being rehired. Last month, the number of Americans on temporary layoffs fell by 1.5 million to 4.6 million. About 36% of unemployed workers said they were on temporary layoff, down from 45% the previous month.

Yet the ranks of workers permanently laid off jumped from 3.4 million to 3.8 million, underscoring that a growing number of temporary layoffs have become permanent.

With COVID-19 cases and hospitalizations rising across the U.S., some states are keeping business constraints in place. And Congress remains deadlocked over a new stimulus package that would provide more funds for beleaguered firms and renew at least part of a $600 federal supplement to state unemployment benefits that expired in late July.

Many businesses that exhaust their forgivable federal loans are laying off workers a second time after rehiring them when they first received the money in the spring, according to a Cornell University survey.

Other measures of labor market activity are also flagging. The number of small business employees declined last month for the first time since the start of the pandemic, a drop that can only partly be traced to the Labor Day holiday, according to Homebase, which makes scheduling software.

If that trend continues, it could signal a loss of 500,000 jobs this month, says economist Ian Shepherdson of Pantheon Macroeconomics. That would be the first fall in employment since the depths of the pandemic in April.

Industries that are hiring

Leisure and hospitality, the sector hardest hit by the crisis, led the payroll gains with 318,000, mostly at bars and restaurants. Retail added 142,000; professional and business services, 89,000; and transportation and warehousing, 74,000.

Manufacturing, still recovering from a sharp drop in demand and supply disruptions from overseas, added 66,000 jobs in a sign the sector’s recovery may be picking up. And construction added 26,000 jobs amid a healthy housing sector driven by low mortgage rates and many Americans’ desire to move to rural and suburban areas less affected by the outbreak.

Labor force participation falls

In September, the share of Americans working or looking for jobs – which together make up the labor force – fell to 61.4% from 61.7%. That’s disappointing because the rate generally had risen since April as an improving labor market drew in people who had been on the sidelines.

Some economists also believed the expiration of the extra $600 in weekly jobless benefits should be prodding more people to hunt for work.

The drop in participation highlights “a potential long-term risk for the economy as the pandemic may have created lasting unemployment for many people,” Contingent Macro Research said in a note. 

For example, many older workers who have lost jobs in the crisis have struggled to find new positions and are retiring early. 

Morgan Stanley, however, at least blames the decline on home schooling that resumed last month in much of the country and that's keeping many parents from working or looking for jobs.

Contributing: Michael Collins


The coronavirus (COVID-19) is impacting the global economy and raising fears of a recession. What causes a recession and what are the signs? USA TODAY

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Colorado economy to gain jobs in 2021, but fall short of full recovery

Private sector adds 135,000 jobs in September, spurring fears of economic slowdown

Colorado will gain jobs in 2021, but it will not be able to make up for the economic losses brought by the global COVID-19 pandemic, according to the latest Colorado Business Economic Outlook (CBEO).

The yearly forecast is compiled by the University of Colorado Boulder’s Leeds Business Research Division. The CBEO is the most comprehensive annual outlook on the Colorado economy, breaking down 13 business sectors and seven regions around the state. 

The report will be presented virtually to state business leaders at the virtual 56th annual Colorado Business Economic Outlook Forum Monday, Dec. 7. Industry breakout sessions will follow during midday sessions the rest of the week.

The CBEO projects Colorado will regain 40,500 jobs (1.5%) in 2021, which is less than one-third of the state’s estimated 2020 job losses.

“It will continue to be a bumpy road as long as the economy goes through rolling lockdowns,” said Leeds Senior Economist Richard Wobbekind. “The outlook for 2021 hinges on a vaccine’s ability to reopen the economy, particularly in the service sectors. Our expectation is a stronger second half of the year.”

Colorado will ly fall the top 10 states for employment growth in 2020 and 2021, Wobbekind predicted.

The two industries hardest hit by the COVID-19 economic downturn—leisure and hospitality and trade, transportation and utilities—are projected to grow most in 2021. Leisure and hospitality are expected to add 19,200 jobs while trade, transportation and utilities are predicted to gain 14,700. All told, nine of the state’s 11 industries are expected to gain jobs.

The government sector is expected to lose the most jobs to the tune of 6,900. The information sector is projected to lose 1,100 jobs.

Work-from-home changes spurred by COVID-19 will continue to impact commercial real estate, transportation and retail sales, according to the CBEO.

Colorado’s population growth will be the slowest since 2003, adding an estimated 53,300 people, according to the State Demography Office. Just 35,100 new Colorado transplants will come from net in-migration.

Key industry 2021 forecast

The current conditions and forecasts of the following industries are included in the Colorado Business Economic Outlook. 

Construction employment is projected to remain flat, with zero new jobs.

Private education and health services sector will earn back 4,500 new jobs, a change of 1.3%.

The CBEO anticipates financial activities earning 2,500 jobs in 2021, a change of 1.5%.

Government will see the largest job losses next year, according to the CBEO, shedding 6,900 jobs for a loss of 1.6%.

The information sector is also projected to lose 1,100 jobs, which is roughly a 1.5% decline from 2020.

Leisure and hospitality will see the largest job gains, with 19,200 jobs. That represents a 7% change from 2020.

Manufacturing is expected to see a 1.5% gain for 2,300 jobs.

Another 400 jobs are anticipated in the natural resources and mining sector, which is a 2% gain.

Professional and business services, a sector that includes professional, scientific and technical services, management of companies, waste management and remediation services, should expect 4,400 jobs (1%).

The CBEO projects trade, transportationa and utilities to see the second largest job gains with 14,700 jobs or 3.1%.

Other services, such as religious, grantmaking or civic organizations, will see about 500 jobs (0.5% gain).

Around the state

Boulder County: Boulder County’s robust, collaborative economy is expected to aid COVID-19 recovery efforts after losing roughly 15,700 jobs as of September 2020.

Kit Carson County: Prices for commodities, such as corn, continue to be low, hampering the main economic driver for this part of the state, though unemployment remains lower than the state average.

Mesa County: Mesa County is outperforming the state and nation with its COVID-19 recovery. Unemployment fell from 12.6% in April to 5.7% in September. The state’s extended Rural Jump-Start program continues to be a draw for economic development.

Northern Colorado: A diverse industry mix may have helped ward off the worst of the pandemic’s economic pains. Area business leaders believe an educational focus on industry-relevant training may have prepared the region’s workforce for the sudden changes of 2020.

Pueblo County: A 4.1% unemployment rate in 2019 rose to 11.7% by April, thanks to COVID-19. It fell to 7.5% by September, a rate still higher than the rest of the state. The recently completed Historic Arkansas River Project is driving business downtown. High-tech economic development projects have also continued on despite the pandemic. 

Southern Colorado: El Paso County unemployment more than doubled from September 2019 (2.8%) to September 2020 (5.9%). Even so, that marks a sharp recovery from the peak of the pandemic in April, when the county measured 12.5% unemployment. Aerospace and defense contractor business may cushion the area’s economy.

Southwest Colorado: A drought not rivaled since the 1500s is piggy-backing on top of COVID-19 in this area. Talent recruitment, talent development and increased broadband access are expected to play key roles in recovery.

Read the full report here


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