Monday, December 6

Slower US job gains anticipated; permanent unemployment in focus

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Walt Disney Co. said this week it would lay off roughly 28,000 employees in its theme parks division. American Airlines and United Airlines, two of the largest US carriers, said they were beginning furloughs of more than 32,000 workers on Thursday, absent additional government assistance .

As the pandemic drags on, furloughed workers are in danger of losing their jobs permanently. There were 3.4 million people who had lost their employment for good in August, accounting for 25% of the 13.6 million unemployed.

“One reason for temporary job losses becoming permanent is the length of the pandemic, the longer it runs, the higher the chances of business failures,” said Beth Ann Bovino, chief US economist at S&P Global in New York.

“On top of that, if state and local governments, which are some of the country’s largest employers, don’t get budget relief from the federal government, there will likely be more pressure to cut positions, rather than just furlough employees.”

Government payrolls are expected to have been flat or declined in September because of the departure of the temporary Census hires and layoffs at state and local government education departments as many school districts shift to online learning.

The unemployment rate is forecast falling to 8.2% in September from 8.4% in August. The jobless rate has declined from a high of 14.7% in April. It has been biased down by people misc classifying themselves as being “employed but absent from work.” With many now enduring long spells of joblessness, economists believe the unemployment rate will not see its pre-pandemic level of 3.5% until mid-2024.