Here’s what you need to know:
The Labor Department is expected to report on Friday that U.S. employers continued to bring back workers in September, but that the loss of momentum that began over the summer has continued into the fall.
Forecasters surveyed by Bloomberg estimate that the report, due at 8:30 a.m., will show that the economy added 875,000 jobs in September, down from 1.4 million in August and close to five million in June. The unemployment rate is expected to fall to 8.2 percent from 8.4 percent in August and a record high of nearly 15 percent in April.
But forecasters have struggled throughout the pandemic, and the range of estimates is unusually broad this time: The most optimistic economist in Bloomberg’s survey expects a gain of 1.8 million jobs. The most pessimistic expects a loss of 100,000.
Whatever the number, the report could have significant economic and political implications.
This will be the last monthly jobs report — and one of the last major economic data releases — before the presidential election. It will probably provide fodder for both major candidates: President Trump and his supporters can accurately say that the economy has rebounded — and unemployment has fallen — much faster than many forecasters expected last spring. Democrats can say, just as accurately, that the recovery is slowing at a time when millions remain out of work.
Economists say the slowdown is at least partly a result of the expiration of federal aid programs for households and businesses, and they warn that it could worsen if Congress doesn’t provide more help. Aneta Markowska, chief financial economist for the investment bank Jefferies, said it was hard to predict what Friday’s jobs numbers would show, but said she knew what October would look like without a deal on a “Phase 4” spending package.
“Beyond September, it’s very binary,” she said. “Everything depends on Phase 4 and whether we get that or not.”
Friday’s report could be a factor: An unexpectedly weak report could put more pressure on Congress to reach a deal, while a strong report could lead Senate Republicans, many already skeptical of further spending, to block new aid.
Global markets dropped Friday, and Wall Street was poised for a drop of more than 1 percent, after President Trump declared that he and the first lady had tested positive for the coronavirus.
European markets opened more than 1 percent lower in early trading, though they clawed back some territory later in the morning and were hovering at about half a percent lower, with the benchmark Stoxx Europe 600 down about 0.3 percent.
Futures tracking the S&P 500 predicted a drop of about 1.1 percent when trading starts later in the morning.
Adding to the downbeat mood in markets, the U.S. Labor Department’s jobs report for September, to be released later Friday, is expected to show that while employers continued to return employees to work, the improvement in the labor market is losing momentum.
The news of Mr. Trump’s health pushed prices for United States Treasury bonds higher, sending yields lower. Gold prices also rose, as did the value of the Japanese yen against other currencies. These are all traditional haven assets that investors buy when they want to reduce risk.
Oil futures slid, with Brent crude and West Texas Intermediate, the two main benchmarks, down about 3 percent. Prices for other commodities fell too.
In Japan, where the news broke late on the trading day, stocks finished nearly 1 percent lower after spending most of the day in positive territory. Most other Asian markets were closed for autumn holidays.
The unemployment insurance system — the main artery for delivering financial assistance to laid-off workers — has been besieged during the coronavirus crisis by fraud schemes aimed at bilking the government out of hundreds of millions of dollars.
Most of the fraud is being engineered by criminals, some of them working together, who have stolen or bought other people’s identities.
The U.S. Labor Department recently made fraud detection a priority, dedicating $100 million to combat the problem. But several state officials and security experts say some of the efforts have been misdirected, designed to uncover workers misrepresenting their eligibility.
“The focus continues to be on lying instead of stealing,” said Suzi LeVine, the commissioner of the Employment Security Department in Washington State. Traditional fraud-prevention strategies, she said, “will not help us catch these thieves.”
In California, fraud has been so pervasive that officials have suspended processing jobless claims for two weeks to put new controls in place and reduce a bulging backlog.
Unemployment insurance has generally not been a ripe target because states have been reducing benefits and tightening access. That changed after Congress moved in March to help workers suddenly left jobless when the coronavirus crisis upended the economy.
Handled by the states, pandemic jobless benefits were meant to cover self-employed, part-time and gig workers; independent contractors; and others ordinarily ineligible for unemployment insurance. But the desire to get money quickly to households facing eviction, hunger or financial ruin made the program vulnerable to swindlers. It depends largely on individuals’ certifying that they are unemployed because of the coronavirus pandemic.
“There is a low barrier to entry for potential scammers and criminals who are interested in getting involved with this form of fraud,” Parker Crucq, a senior threat intelligence analyst at the cybersecurity firm Recorded Future.
It’s been a bad year for travel and entertainment spending as the coronavirus has kept concertgoers home and has canceled vacation plans. That falloff is particularly pronounced among baby boomers.
Travel and entertainment spending was down by 56 percent for Chase credit card holders born in 1964 or earlier, based on data through Sept. 26. That compared with a 40 percent drop from a year ago for cardholders born since 1981 — millennials and Generation Z.
That divergence says something about the consumer economy. The generational gap is evidence that “declines are likely driven by a combination of supply and demand,” Jesse Edgerton and Gopal Kumar, economists at J.P. Morgan, wrote in an Oct. 1 note.
While spending in the category is down partly because of ongoing restrictions on large gatherings, the difference across age groups suggests that older spenders’ “greater susceptibility to Covid-19 has left them more cautious about returning to normal levels of travel and entertainment,” the two analysts wrote.
Federal Reserve officials and economists regularly warn that it is unlikely that the economy can stage a full recovery until the virus is under control for precisely that reason: Consumers will not feel comfortable returning to some higher-risk settings until they know that they will not get sick.
“The outlook for the economy is extraordinarily uncertain and will depend in large part on our success in keeping the virus in check,” Jerome H. Powell, the Fed chair, said at a news conference earlier this month.