| 10.7.20

The economy added 661K jobs, unemployment fell to 7.9% in September as labor market recovery slowed

How do you feel about the September jobs report?

By Eric Revell, Countable News

The Bureau of Labor Statistics (BLS) on Friday released its jobs report for September 2020, which found that the U.S. economy added 661,000 jobs in September and the unemployment rate fell to 7.9%, a decline of 0.5 percentage points. The job gains fell shy of the 800,000 forecasted by Dow Jones.

The September jobs report builds on the previous employment gains of 2.7 million jobs in May, 4.8 million in June, 1.8 million in July, and over 1.4 million in August ― each of which surpassed the prior historical record for monthly jobs added (1.1 million in September 1983).

The economy lost 22.2 million jobs in March and April due to lockdown measures initiated to slow the spread of COVID-19, so the five month run of job gains represents about 51% of those that were lost and leaves the economy 10.8 million jobs below its February level.

This is the last monthly jobs report that will be released before the presidential election, as the October report will arrive the Friday after Election Day. Coincidentally, the unemployment rate is nearly identical to the 7.8% unemployment rate reported by the BLS in the final jobs report before the 2012 presidential election, when the U.S. was slowly recovering from the Great Recession while Barack Obama and Mitt Romney faced off in the polls. This USAFacts chart shows the monthly unemployment rate dating back to 2007:

Leisure and hospitality gained 318,000 jobs in September, with most of the gain occurring in food services and drinking places (+200,000). Despite 3.8 million jobs added in food services and drinking places over the last five months, it’s still 2.3 million jobs below its February, pre-pandemic level.

Retail added 142,000 jobs in September, with the largest gains coming in clothing stores (+40,000), general merchandise (+20,000), motor vehicle and parts dealers (+16,000), and health and personal care stores (+16,000). Retail employment is 483,000 lower than its February level.

Healthcare and social assistance employment grew by 108,000 jobs in September, but the sector is still 1 million jobs below its February level.

Professional and business services added 89,000 jobs in September, bringing gains since April to a total of 910,000 jobs, which is 1.4 million below its February level.

Transportation and warehousing gained 74,000 jobs in September, bringing the sector’s gains since May to 291,000 ― a level that’s 304,000 jobs below the sector’s February level.

Manufacturing added 66,000 jobs in September. Durable goods accounted for most of the gains, including motor vehicles and parts (+14,000) and machinery (+14,000). The manufacturing sector is 647,000 jobs below its February level.

Unemployment declined in September from its August level for all major worker groups, as this USAFacts chart shows:

Unemployment rates declined for adult men (to 7.4% from 8% in August), adult women (7.7% from 8.4% in August), and teenagers (15.9% from 16.1% in August).
Unemployment rates declined among whites (7% from 7.3% in August), blacks (12.1% from 13.1% in August), Hispanics (10.3% from 10.5% in August), and Asians (8.9% from 10.7% in August).

Employment in July was revised up by 27,000 jobs (from a gain of +1,734,000 to +1,761,000).
Employment in August was revised up by 118,000 jobs (from a gain of +1,371,000 to +1,489,000).
From March through August, the BLS published an estimate of what the unemployment rate would have been had misclassified workers been included. The misclassification hinges on a question about the main reason people were absent from their jobs, with people absent due to temporary, pandemic-related closures recorded as absent due to “other reasons” as opposed to unemployed due to temporary layoff.
Under this same approach, the September unemployment rate would have been 0.4 percentage points higher than reported. The BLS notes that this represents the upper bound of their estimate of misclassification and probably overstates the size of the misclassification error.
According to usual practice at the BLS, data is accepted as recorded in the household survey. To maintain data integrity, no ad hoc actions are taken to reclassify survey responses.

(Photo Credit: iStock.com / halbergman)