The State of the Recovery: unemployment, slowing job growth, and the 2nd stimulus
The report card is in... and the US might have to retake Recovery 101. The US added a lower-than expected 661K jobs in September. Since this was the last jobs report before the election, let's take a stroll down memory lane:
- 3.5%: The unemployment rate in February, when the only masks we've ever worn are charcoal sheet masks.
- 14.7%: The unemployment rate in April, after COVID lockdowns hit. The US economy lost nearly 22M jobs in March/April.
- 13.3% to 11.1%: The unemployment rate fell from May to June as businesses reopened. The US added 2.5M jobs in May and 4.8M jobs in June.
- 10.2% to 8.4%: Unemployment continued to decline as the US added 1.8M jobs in July and 1.4M jobs in August.
Which brings us to September... 661K new jobs means a big slowdown in recovery. The unemployment rate fell to 7.9%, but that's mainly because 1.1M people dropped out of the labor force in September. 865K of those people were women. Many believe this was driven by the fact that kids are Zooming into school.
Even with a vaccine, economic medicine will be necessary... The $2.2T stimulus in March was largely responsible for driving recovery, but most of those benefits have now run out. With 9 companies in the final phase of testing, the race for a COVID-19 vaccine is hot. Even so, the CDC says vaccines likely won't be widely available to Americans until summer 2021. With the pace of recovery slowing, Congress should try to put party differences aside to inject some aid ASAP.