American Airlines Group and United Airlines Holdings have begun laying off more than 32,000 workers between them now that federal support for airlines’ payrolls has ended on 1 October. The Disney Co. has announced 28,000 workers temporarily furloughed now will be terminated.
Allstate Insurance is cutting 3,800 jobs, about 8 percent of its pre-pandemic labor force. Houghton Mifflin Harcourt, a major publisher of textbooks and educational materials, is paring its payroll by 22 percent.
Other companies are likely to add to the ranks of the unemployed.
The end of the federal $600 weekly unemployment benefit has left millions with a subsistence income, hobbling consumer spending that could propel the economy and keep workers on the job. Also, the one-time $1,200 federal stimulus payment for individuals also has largely been spent or saved against potential hard times ahead.
“The layoffs are an additional headwind in an already weak labor market,” said Rubeela Farooqi, High Frequency Economics’ Chief U.S. Economist. “As long as the virus isn’t contained,” the soft labor market “is going to be an ongoing phenomenon.”
In September, nonfarm payroll rose by 661,000 jobs, not the 800,000 expected by economists surveyed by Dow Jones. The gap was attributed to thousands of schools being fully or partially closed, cutting 216,000 jobs, and 34,000 census-takers ended their work.
There were job gains, however, throughout other areas of the economy as the unemployment rate fell from 8.4 to 7.9 percent.
Leisure and hospitality businesses led the increase, adding 318,000 workers. Retailers took on 142,000 workers and health care and social services 108,000.
Transportation and warehousing gained 74,000 workers, manufacturers added 66,000, and financial services 36,000.
Also in September, about 318,000 furloughed workers were permanently fired. About 10 million of the 22 million jobs lost during the shutdown have yet to be recovered.
TREND FORECAST: The rapid devastation of the hospitality, travel, restaurant, retail, entertainment, convention/trade show, theme park, theater and cinema businesses – and those who worked for them – that has been caused by government lockdowns is unprecedented.
As we have noted, as the economy weakens and tax revenues decline, federal, state, and city governments will fire more employees, thus dramatically increasing long term job losses.
