As the shocking news emerged that the president and first lady tested positive for the coronavirus, some investors may have wondered if this was the “October Surprise” they feared. Presuming that the President recovers, investors are also absorbing the last employment report before the election. The September jobs report showed that the pace of
economic progress is slowing down. The economy added a lower than expected 661,000 new positions, the smallest rise since the job recovery began and a significant deceleration from the spring bounce back. (Note: recent announcements of layoffs from large airlines, Disney, publisher Houghton Mifflin, insurer Allstate, and designer Ralph Lauren, were not included in the September report.)
The U.S. now has 10.7 million fewer workers employed than it did in February. To put that into perspective, for the five years starting in 2015 through 2019, the economy added a total of just over 11.6 million jobs, so the pandemic has wiped out almost five years of job gains. At the current pace, it would take another 16 months for the U.S. to regain the pandemic jobs lost.
The unemployment rate fell from 8.4% to 7.9%, but partially for the wrong reason–the number of people who are in the work force (the “participation rate”) dropped to 61.4%, two percent lower than it was before the pandemic. Front and center of those opting out, are women, especially those with school-age children.
The September jobs report syncs up with findings from “Women in the Workplace 2020”, an annual analysis conducted by McKinsey & Company and Lean In, which surveyed more than 40,000 people across 317 companies from June to August of 2020. McKinsey found that “more than one in four women are contemplating what many would have considered unthinkable just six months ago: downshifting their careers or