- Several large companies have announced tens of thousands of layoffs as revenues decrease and little headway is made on federal stimulus efforts
- Job losses raise concerns of a weak labor market and slowing economic recovery
- Unemployment figures show improvement, but jobless claims remain elevated
Tens of thousands of workers in industries ranging from insurance and airlines to book publishing and oil are receiving pink slips, raising concerns of a weak labor market and slowdown in the U.S. economic recovery.
Businesses have started to cut personnel as a cost-saving measure as the COVID-19 pandemic continues to reduce demand for many products and services. Among other developments, Disney theme parks are laying off 28,000 workers, American Airlines and United Airlines are looking to cut 21,000 positions, and the insurer AllState will eliminate 3,800 positions. Thousands of small businesses have also closed, with the pandemic doing considerable damage to sectors such as travel, hospitality, tourism, and food service.
Initial jobless claims fell in September but remained elevated, an indication that job losses have been ongoing in recent months, including furloughs that have become permanent layoffs. The economy has recovered only about half of the 22 million jobs lost in the pandemic, and disagreements over how to craft a new federal COVID-19 relief package have also led economists to believe that economic growth will be less robust in the last quarter of the year.
Earlier this week, the Federal Reserve estimated that it will take more than three years for unemployment levels to drop to pre-pandemic levels. The latest job report indicated that 661,000 new jobs were created in September and the national unemployment rate fell to 7.9 percent, but the gains were below forecasted numbers and the smallest gain since the reopening of the economy.
