The September jobs report, the last before the election, took a back seat Friday to the ostensibly earth-shattering news that both Donald Trump and Melania Trump are infected with COVID-19.
In the very near-term, it’s probably accurate to say that “hardly anything else matters”, to quote Deutsche Bank’s Alan Ruskin. But far from being a distraction, Trump’s diagnosis should serve to underline the broader tragedy — it should be a reminder of the human and economic toll the virus has extracted from the country, as well as the world.
With that in mind, a look at some key underlying details from the September jobs report reveals the perpetuation of disturbing trends, even as there are some bright spots. For example, permanent job losses, which I look at each month, jumped another 345,000 in September after rising 534,000 in August.
At almost 3.8 million, the total is the highest in seven years.
That is structural damage — the dreaded “scarring” effect. And it comes as the market digests a wave of new layoffs including massive job cuts at Disney and major airlines, among others.
Those losses can be expected to start showing up in the data in the months ahead. A stimulus compromise between Nancy Pelosi and Steve Mnuchin could help reverse some of the airline layoffs, but a bipartisan deal proved elusive this week.
In the same vein, the number of Americans unemployed for 27 weeks or more surged by 781,000 last month. While the total (a little more than 2.4 million) is nowhere near the highs hit after the financial crisis, the monthly surge looks like the largest on record.
The gap between white and African American unemployment actually ticked lower for the first time in months during September, but it’s still much wider than it was pre-COVID.
The pandemic laid bare the myriad inequities endemic in American society, not least of which is pernicious racial inequality. The unemployment rate for white Americans dropped to 7% last month. It was 12.1% for African Americans.
Finally, note that unemployment duration (the median) has now reached an eight-year high.
I suppose what I would say in closing is that if you observe the figure (below) and compare it to post-financial crisis peaks in permanent job losses and long-term unemployment, precedent suggests we’ve yet to see the worst of the structural damage in the labor market.
While the headline figures (the top-line NFP print, unemployment rate, etc.) may well continue to improve, a hodgepodge of underlying metrics could take years to recover.
Unless, of course, this time is different.