Looking at how things are turning out in the market, with companies making layoffs permanent and others striving to cut costs, the job growth in September was expected to have grown at a slower rate compared to the previous month. However, the economy currently has many uncertainties, as the pandemic continues to persist, and the presidential elections are approaching.
What to expect from the September monthly employment report
According to Dow Jones, the September monthly employment report released on Friday is expected to indicate the addition of 800,000 nonfarm payrolls, compared to 1.37 million recorded in August.
Moreover, the report is expected to show the poised labor market recovery since millions of Americans lost their jobs in March and April, resulting from the COVID-19 pandemic.
As the economy continues to reopen steadily, leisure and hospitality sectors are expected to play a significant role in job gains, while the construction sector is expected to have been at the forefront in leading the recovery due to the incline in homebuilding.
However, according to Dow Jones, the unemployment rate is expected to drop to 8.2% from 8.4%.
Recently, Disney reported its plans to lay off 28,000 employees, mostly at theme parks, while the airlines are expected to lay off thousands of more workers if they do not get any government aid.
The situation may seem like it’s getting better on one hand, but on the other one, it’s worsening. We don’t know what to expect with the way things are currently turning out. The pandemic isn’t going away any soon, the presidential elections are very close, and much focus now is on the polls. The government stimulus packages are already expired, and others are nearing expiry. Besides, the current states’ public health policies do not allow some businesses such as theme parks to open, which is why Disney is laying off the employees. All of these are the reasons why companies are still laying-off employees.
The situation could be worse
According to Diane Swonk, an economist at Grant Thornton, there should be some hiring in the leisure and hospitality sectors, but September features Labour Day, a period when some seasonal hiring is trimmed off.
“Leisure and hospitality is still 4.4 million in the hole, and it’s dominated by food service,” Swonk said. “Winter is coming and outdoor dining could end in some places, leading to more layoffs.”
Moreover, Swonk is concerned that virtual learning is hurting the job market for parents who were staff in schools, and they can’t go to work since schools don’t need as much staff.
What could help
Elsewhere, economists argue that the fiscal stimulus being negotiated by the government agents (Treasury Secretary and House Speaker) could significantly help the economy and the job market.
Clearly, there is a need for another stimulus package. Without another round of stimulus package, the economy will weaken further, and the significance of the previous government efforts could be washed away. The government needs to develop policies that will protect the economy and the sources of employment opportunities for Americans. The government needs to step up its efforts in protecting the economy and the American jobs now more than ever.
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Disclaimer: The views and opinions of Eric Lawrence Frazier are his own and do not necessarily represent First Bank or any organization affiliated with Eric Lawrence Frazier, or the Power Is Now Media Inc. First Bank is an Equal Credit Opportunity Lender. Eric Lawrence Frazier, MBA, is also a Vice President and Mortgage Advisor with First Bank. NMLS#461807 and a California Licensed Real Estate Broker DRE# 01143482. Email: Eric.firstname.lastname@example.org. Ph: 714- 475-8629.
Eric Lawrence Frazier MBA
President and CEO
The Power Is Now Media Inc.