By Isaac Cohen*
The US Labor Department issued last week the last employment report before the November election, revealing a slowdown in hiring during the last three months. Therefore, the expectation of a “V” shaped recovery can be set aside. Instead, without support, the alternative scenario includes a long and weak recovery at least into the end of 2022.
According to the report, 661,000 new jobs were created in September, less than during each of the last two months, mostly due to a reduction of 216,000 jobs in government. Still, in September, the unemployment rate decreased by half a percentage point, to 7.9 percent, from 8.4 in August.
The decrease in the unemployment rate was due to a reduction of almost 700,000 in the number of persons looking for work. Closures of schools and child-care facilities, in September, led to a decrease of 143,000 in the number of working women, while their participation in the labor force fell to 55.6 percent, from 56.1 percent. Additionally, permanent job losses are higher among minorities, at 21 percent and 23 percent for Blacks and Hispanics, respectively.
In all, half of the jobs lost in March and April have come back, which means that there are still 11 million unemployed, more than the 8.7 million jobless at the peak of the 2008 Great Recession. Federal Reserve Chairman Jerome Powell today said, with “little support” there will be “a weak recovery.” https://www.federalreserve.gov/newsevents/speech/powell20201006a.htm
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, TELEMUNDO, UNIVISION and other media.