The scars from Covid
EDITOR'S NOTE
So much to digest this morning. The President and the First Lady now have Covid-19. And we got a bunch of new information about how the ongoing pandemic is affecting the U.S. labor market. The "scarring" is beginning to set in.
All this probably makes the odds of another big Covid relief bill from Washington a bit higher than they had been; hence the market's initial 500+ point drop on the president's positive test overnight has moderated to about a 150-point decline as I write this.
What an incredibly frustrating time this is. So you happen to be a park worker at Disney, let's say, coming off years of record attendance, and suddenly your job is gone. Of course companies have to "resize" their workforces for this new normal, as we were discussing with Steve Liesman and Dan Alpert this week. But everything was fine before; it will one day be fine again; and yet you're completely caught in the lurch in the meantime.
It's why I keep using the word "relief" instead of "stimulus" when describing the Covid bills in D.C. This is a pandemic, a national tragedy. It deserves better language than the financial crisis. It doesn't mean the decisions D.C. has to make are any easier over who to support, and how much so. It just means we need to keep in mind how different this catastrophe is.
The jobs report this morning illustrates that. We added 661,000 jobs in September, less than expected. Government jobs fell, in small part (-34,000) because of Census layoffs, but in larger part (-281,000) in education. We're still 10.7 million jobs overall below where we were in February, before the pandemic hit. We've retraced roughly half the job loss, and the very, very difficult question now is how quickly we can retrace the rest of it.
The unemployment rate dropped to 7.9%, half because of job gains, and half because of people leaving the labor force, which is the growing worry. The number of permanent job losers jumped higher again, by 345,000, to 3.8 million.
The hope all along has been that the initial V-shaped rebound--both in the markets and the economy--fueled by the government's massive initial response to the pandemic would hand off to a more self-sustaining recovery that needs less aid. We are still moving along that trajectory, but it's starting to feel more precarious.
Much, much more to come this afternoon.
See you at 1 p.m.,
Kelly
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