29 September 2020

On Friday, 2 October 2020, the Bureau of Labor Statistics (BLS) will release its monthly jobs report for September 2020. The consensus among economists is that the U.S. economy added just under 900,000 jobs between August and September – the first time month-over-month job growth is expected to come in under 1 million since many states first started reopening back in May 2020. If these expectations are borne out in the report, then the national unemployment rate should remain relatively flat, falling somewhere between 8% and the August 2020 rate of 8.4%.

Up until the COVID-19 pandemic, the last time the U.S. saw an unemployment rate above 8% was all the way back in August 2012, during the slow, years-long recovery from the Great Recession of 2008-09. Following that recession, when the unemployment rate peaked at 10% in October 2009, it took more than eight years for the unemployment rate to fall by six percentage points (it reached 4% in March 2018). Because unemployment has already dropped by more than six percentage points since the height of the pandemic – when it peaked at 14.7% in April 2020 – some observers have been tempted to say that we are on track for a quick recovery. A relatively flat September 2020 jobs report should provide a much-needed reality check.

Between March and April 2020, the U.S. economy shed more than 22 million jobs. While much has been said about the 10.6 million jobs that were “gained” since that time, we are still a long way from recovery. Adding in the roughly 900,000 jobs that are expected to be announced on Friday, there are still nearly 11 million fewer jobs today than there were at the start of the pandemic. In another troubling sign, last week’s unemployment insurance (UI) report from the Department of Labor showed an uptick in new UI claims for the first time in three weeks – and the delay in a second federal stimulus package is continuing to put downward pressure on public and private sector jobs across the country.

Between slow job growth and rising UI claims, this month’s economic data suggest we might have reached the end of recent narratives about “strong” growth and “historic” recovery. The pace of progress is likely to downshift meaningfully from here on out, setting us up for a lengthy period of rebuilding and gradual economic improvements.

Nowhere are these circumstances more apparent than in New York State, where the unemployment rate has been higher than nearly every other state, and where upticks in new COVID cases have coincided with an upward trend in unemployment insurance claims. With New York’s unemployment rate already four percentage points higher than the national average, news of relatively sticky unemployment levels and only modest job gains suggest that the Empire State will continue to be among the states hardest hit by the pandemic, thus putting it on one of the longer timetables for recovery.