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Job Growth Slows, But Unemployment Rate Falls Below 8% Nationally

The economy added fewer jobs in September than it added in August, and fewer than…

  • October 22, 2020

The economy added fewer jobs in September than it added in August, and fewer than Wall Street analysts expected. While the unemployment rate did fall below 8% for the first time in months, many analysts fear that the pace of job creation is petering out.

According to the Labor Department, total nonfarm payroll employment rose by 661,000 in September, and the unemployment rate declined to 7.9 percent.

That’s way down from the 1.4 million jobs added in August, the 1.8 million jobs added in July, the 4.8 added in June and the 2.7 million added in May. It was also disappointment for economists, who had been expecting to see 800,000 jobs added in September.

In September, notable job gains occurred in leisure and hospitality, in retail trade, in health care and social assistance, and in professional and business services. Employment in government declined over the month, mainly in state and local government education.

In September, the unemployment rate declined by 0.5 percentage point to 7.9 percent, and the number of unemployed persons fell by 1.0 million to 12.6 million. Both measures have declined for 5 consecutive months but are higher than in February, by 4.4 percentage points and 6.8 million, respectively.

Economists fear a cold winter may lay ahead. Congress has failed to pass a further stimulus package. With the election looming, and the political fate of the country uncertain, it does not bode well that companies have become more pessimistic, and are indicating they will taper off on hiring.

Of course, going into the weekend, the world learned that President Trump has contracted COVID-19. These further clouds the future in doubt, and uncertainty is exactly what businesses don’t like to experience as they make hiring plans for the near future.

The impulse now is for both businesses and consumers to hold off, pull back, wait and see what happens next. Thus, hiring slows, growth slows and recovery stalls. That, at least, is what economists fear might be happening. They say the real telling numbers will be the 4th quarter ones.