WASHINGTON — The final jobs report before Election Day a month from now showed hiring slowed in September even as the U.S. unemployment rate fell to 7.9% — a mixed result for President Donald Trump, who has staked his reelection in part on the economy.
The Labor Department said Friday that employers added just 661,000 jobs last month amid the coronavirus outbreak, down from 1.5 million in August and 1.8 million in July.
Unemployment fell from 8.4% in August, but that mainly reflected a decline in the number of people seeking work, rather than a surge in hiring. The government doesn’t count people as unemployed if they aren’t actively looking for a job.
“There seems to be a worrisome loss of momentum,” said Drew Matus, an economist at MetLife Investment Management. “There’s a lot of caution on the part of employers.”
With September’s hiring gain, the economy has now recovered slightly more than half the 22 million jobs wiped out by the coronavirus, which has killed over 200,000 Americans and infected more than 7 million. With many businesses and customers plagued by fear and uncertainty, some economists say it could take as long as late 2023 for the job market to fully recover.
This week, moreover, brought a new wave of layoff announcements reflecting the continuing slump in travel and tourism: Disney is cutting 28,000 jobs, Allstate will shed 3,800, and U.S. airlines said as many as 40,000 employees are losing their jobs this month as federal aid to the industry expires.
In another problematic sign in Friday’s report, the number of laid-off workers who say their jobs are gone for good rose from 3.4 million to 3.8 million.
While unemployment has tumbled from April, when it topped out at 14.7%, it is still high by historical standards. For the Trump administration, the pandemic recession has been a whiplash, with unemployment soaring from a half-century low in February of 3.5% to a 90-year peak in April of 14.7%.
The U.S. gained nearly 7 million jobs from Trump’s 2017 inauguration until the pandemic struck. Now it has 3.9 million fewer than when he took office.
Friday’s numbers offered voters a final look at the most important barometer of the economy before the Nov. 3 presidential election — an election whose outcome was thrown into deeper uncertainty by the announcement Friday that Trump has tested positive for the coronavirus.
Still-high unemployment is a potential political liability for Trump. Yet President Barack Obama was re-elected in 2012 even with unemployment at 7.8% on the eve of the election.
And even as the economy has struggled to sustain a recovery, it has remained one of the few bright spots in Trump’s otherwise weak political standing. Roughly half of voters approve of his performance on the economy.
Voters in some battleground states may feel differently. In August, the latest data available, unemployment was 10.3% in Pennsylvania and 8.7% in Michigan, both above the national rate that month. Florida was at 7.4% and Wisconsin at 6.2%, with both states below the national average.
The economy is under pressure on a number of fronts, including the expiration of federal aid programs that had fueled rehiring and sustained the economy — from a $600-a-week benefit for the unemployed to $500 billion in forgivable short-term loans to small businesses.
The September jobs report showed that women in their prime working years are quitting their jobs and leaving the workforce at much higher rates than men, a sign that many women are staying home to help their children with remote schooling.
“Women continue to bear the brunt of this recession,” said Julia Pollak, a labour economist at ZipRecruiter. “They are supervising at-home schooling.”
This is the first U.S. recession in which service-sector jobs have been hardest hit, instead of goods-producing industries like manufacturing, and women make up a greater share of the workforce in service industries like retail and health.
Many in-person service providers, such as gyms, movie theatres, and restaurants are still employing far fewer people than before the outbreak.
Charlie Cassara, who owns two gyms on New York’s Long Island, said he has brought back only one of his 20 employees since gyms were allowed to reopen at 33% capacity in late August. He said many of his clients have stayed away out of fear of the virus.
He has been unable to pay full rent and expects he will have to close one gym by the end of the year unless things change.
“Everybody is pretty much hanging on now with the hope that maybe they are going to have a chance if they can survive the winter, but the outlook is not good,” said Cassara, president of the New York Fitness Coalition, which has sued New York City to allow indoor fitness group classes.
The unemployment rate for Black workers fell sharply last month but is still much higher than it is for whites. The African-American rate dropped to 12.1% from 13% in August. For whites, unemployment declined from 7.3% to 7%. For Hispanics, the rate fell from 10.5% to 10.3%.
Overseas, unemployment rose for a fifth straight month in Europe in August and is expected to climb further amid concern that government support programs won’t be able keep many businesses hit by coronavirus restrictions afloat indefinitely.
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Associated Press writers Steve Peoples and Alexandra Olson in New York contributed to this report.
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
OTTAWA – Canada’s inflation rate fell to two per cent last month, finally hitting the Bank of Canada’s target after a tumultuous battle with skyrocketing price growth.
The annual inflation rate fell from 2.5 per cent in July to reach the lowest level since February 2021.
Statistics Canada’s consumer price index report on Tuesday attributed the slowdown in part to lower gasoline prices.
Clothing and footwear prices also decreased on a month-over-month basis, marking the first decline in the month of August since 1971 as retailers offered larger discounts to entice shoppers amid slowing demand.
The Bank of Canada’s preferred core measures of inflation, which strip out volatility in prices, also edged down in August.
The marked slowdown in price growth last month was steeper than the 2.1 per cent annual increase forecasters were expecting ahead of Tuesday’s release and will likely spark speculation of a larger interest rate cut next month from the Bank of Canada.
“Inflation remains unthreatening and the Bank of Canada should now focus on trying to stimulate the economy and halting the upward climb in the unemployment rate,” wrote CIBC senior economist Andrew Grantham.
Benjamin Reitzes, managing director of Canadian rates and macro strategist at BMO, said Tuesday’s figures “tilt the scales” slightly in favour of more aggressive cuts, though he noted the Bank of Canada will have one more inflation reading before its October rate announcement.
“If we get another big downside surprise, calls for a 50 basis-point cut will only grow louder,” wrote Reitzes in a client note.
The central bank began rapidly hiking interest rates in March 2022 in response to runaway inflation, which peaked at a whopping 8.1 per cent that summer.
The central bank increased its key lending rate to five per cent and held it at that level until June 2024, when it delivered its first rate cut in four years.
A combination of recovered global supply chains and high interest rates have helped cool price growth in Canada and around the world.
Bank of Canada governor Tiff Macklem recently signalled that the central bank is ready to increase the size of its interest rate cuts, if inflation or the economy slow by more than expected.
Its key lending rate currently stands at 4.25 per cent.
CIBC is forecasting the central bank will cut its key rate by two percentage points between now and the middle of next year.
The U.S. Federal Reserve is also expected on Wednesday to deliver its first interest rate cut in four years.
This report by The Canadian Press was first published Sept. 17, 2024.
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
