Just how resilient is the US economy’s recovery from the coronavirus recession? The weakening of the nation’s job-generating machine in September for a third straight month reinforced doubts.

In an ordinary month in an ordinary year, the adding of 661,000 workers would be extraordinarily good news. In topsy-turvy 2020? Not so much. Last month’s gain looks worrisome because it marks a sharp falloff from 4.8 million added jobs in June, 1.8m in July and 1.5m in August. Economists had expected payrolls to rise by 850,000 in September, according to the data firm FactSet.

With nearly half the 22m jobs that were lost to the viral pandemic still gone, a slowdown in hiring is hardly encouraging. Economists fear the job market will face even more pressure if Congress fails to agree soon on another economic rescue package and if coronavirus cases resurge in the cold weather months and keep consumers hunkered down at home.

Job growth is moderating just as fiscal aid is expiring a toxic cocktail, economists Kathy Bostjancic and Gregory Daco of Oxford Economics wrote in a research note. The slowing momentum in the labour market bodes poorly for the broader recovery and points to increasing scarring effects from the crisis.

The job growth that is occurring is due mainly to employers recalling workers they had temporarily furloughed, not from new hiring. Worse, a rising number of the early layoffs have turned permanent. The number of Americans who considered their job loss permanent rose by 345,000 in September to 3.8m the highest such figure since 2013. More than 2.4m people have been unemployed for at least six months. That’s the most since 2015.

The Labour Department also reported Friday that the unemployment rate fell from 8.4 per cent to 7.9pc. But that occurred mainly because many people stopped looking for work and were therefore no longer counted as unemployed. Here are five takeaways from the September jobs report:

The recovery is leaving women behind

Women accounted for just 43pc of the jobs the economy added in September. Overall, they have borne the brunt of coronavirus-related job losses. In February, before the pandemic hammered the US economy, women had held just over half of Americas jobs.

But the virus and the shutdowns meant to contain it landed hardest on businesses dominated by women: restaurants, bars, beauty shops. Women account for 5.8m (or 54pc) of the 10.7m jobs that have been lost since February.

Women have also been dropping out of the labour force. The number of women who are either working or looking for work fell by 865,000 in September. Some are staying home to care for children who are stuck there until their schools reopen.

The labour force exit of women is not their choice, Betsey Stevenson, an economist at the University of Michigan, wrote on Twitter. Its not them abandoning the economy, their jobs. Its our government abandoning our families and leaving women to pick up the pieces the best they can.

Fewer government jobs

Government payrolls fell by 216,000 last month, partly offsetting a 877,000 gain in hiring by private companies. Federal government jobs dropped by 34,000. That reflected the loss of temporary census jobs.

The biggest driver, though, was a plunge in jobs at state and local governments, which collectively slashed 281,000 jobs in education. That was a casualty of a pandemic that has sharply reduced the number of American schools that are fully open.

Many if not most school districts are running classes either all remotely or a hybrid setup and need fewer teachers, janitors and other staff, Stephen Stanley, chief economist at Amherst Pierpont Securities, wrote in a research report.

Unemployment drops for all races

The unemployment rate dropped last month for all races to 7pc for whites, 12.1pc for Black workers and 10.3pc for Hispanic Americans. But the improvement was driven partly by workers leaving the labour force. The number of people who either have a job or are looking for one dropped by 258,000 for whites, by 194,000 for Blacks and by 127,000 for Hispanics. The government doesn’t count people as unemployed if they’re not actively looking for work.

Published in Dawn, The Business and Finance Weekly, October 5th, 2020