Latest jobs report shows number of permanent layoffs has soared
Under the hood, the August jobs report is bad news for the economic recovery.
The August jobs report released Friday morning showed concerning signs for the economy, as the pace of job creation slowed and the number of permanently unemployed climbed.
The report showed that the economy added 1.4 million jobs in August, decreasing the unemployment rate to 8.4%.
However, the increase in jobs was down from the 1.7 million added back in July, and the 4.8 million from June.
What’s more, 240,000 of the jobs added in August are temporary Census employees who will lose their jobs at the end of September.
Even more concerning to economists is that the number of permanently unemployed workers rose by 534,000, according to the Bureau of Labor Statistics’ report. A whopping 3.4 million workers are now permanently unemployed, a more than 160% increase from 1.3 million in February, when the economy began to tank due to the pandemic.
“I am more concerned about where the economy is now than I was in April,” economist Martha Gimbel told the New York Times. “In April, it was fixable. We’re just letting the scars build up now.”
The jobs report comes one day after the Labor Department announced that workers filed 1.6 million new unemployment claims last week.
Congress, for its part, still hasn’t passed coronavirus relief legislation to help the millions of workers who remain unemployed.
More than a month after Senate Republicans allowed a temporary boost to weekly unemployment payments expire, they still can’t agree on a relief bill. House Democrats passed coronavirus relief legislation on May 15, but the legislation has remained stalled in the Senate, with GOP leaders insisting the Democratic bill is nothing but a “liberal wish list”
“The recovery has been rapid but this is still the easy part of it–with the harder part ahead,” Jason Furman, a former chief economist under Obama, tweeted on Friday.
“We’re still in a bad recession,” he added. “State/local job creation has been weak/negative in recent months & will get worse without aid. And households will run through their cushions soon, consumption growth will start to slow, and that will take a toll on jobs.”
Published with permission of The American Independent Foundation.
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