Jobs Report Disappoints, Dow Futures Dip But Off Overnight Lows After Trump Contracts COVID

President Donald Trump

UPDATED at market open: The DJIA was down 240 points or 0.87%, having shaved half its premarket losses. Media and tech shares were down across the board.

U.S. stocks however had cut their losses by the open following hours of volatile trading, in part, observers speculated, on hopes that President Trump’s positive COVID diagnosis may nudge the passage of a new aid package through Congress sooner rather than later. The next round of COVID relief has been languishing as talks continue between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin.

“It’s sad,” Pelosi said this morning of the President’s diagnosis. “But nonetheless hopeful that it will be a saner approach to what this virus is all about.”

Previously: The U.S. added 661,000 jobs in September, below expectations, the Department of Labor announced Friday, a morning roiled by news of President Trump’s positive COVID-19 test. That news sent U.S. stock futures down sharply overnight but they’ve recovered some ground ahead of the open.

Dow Futures — reflecting stock prices ahead of the start of trading at 9:30 am ET — are off 400 points, or nearly 1.5%. They had been down by up to 500 points overnight after the president’s tweet that he and first lady Melania Trump are both COVID positive.

The DOL said job gains occurred in leisure and hospitality, in retail trade, in health care and social assistance, and in professional and business services. Employment in government declined over the month, mainly in state and local government education. However, pundits were looking for the economy to add at least 800,000 jobs. And today’s number didn’t take into account a raft of layoffs announced last month at major companies from Walt Disney to airlines.

Earlier this week, Disney announced plans to lay off 28,000 people at its U.S. parks.

The unemployment rate declined to 7.9 percent.. The number of unemployed persons fell by 1 million to 12.6 million. Both measures have declined but are higher than in February — pre-COVID — by 4.4 percentage points and 6.8 million people, respectively.

Job cuts announced by U.S.-based employers jumped to 118,804 in September, up 2.6% from August’s total of 115,762, according to a monthly report released Thursday by global outplacement and business and executive coaching firm Challenger, Gray & Christmas. Its numbers are widely quoted.

The majority of cuts continue to come from entertainment and leisure companies, including bars, restaurants, hotels, and amusement parks, which announced 32,099 cuts in September, an 86% increase over the industry’s 17,271 cuts announced in August, and a 2,691% increase over the 1,150 entertainment/leisure cuts tracked in September 2019.

So far this year, these companies have announced 831,150 cuts, a 7,553% increase over the 10,861 cuts announced in the sector through September 2019.

The firm noted that September’s total is 186% higher than the 41,557 job cuts announced in September of 2019. The job cuts bring the yearly total so far to 2.082 million, up 348% from the 464,869 cuts at this time last year. The current year-to-date total already surpasses the record highest annual total – 1,956,876 cuts announced in 2001 – by 125,386 cuts. Challenger began tracking job cut announcements in January 1993.

“We are setting new records for job cuts even though things have improved since the earliest days of the pandemic,” said Andrew Challenger, the firm’s senior VP. “These are uncertain times for everyone, as many states are experiencing an uptick in the number of COVID-19 cases. It is clear we still have a long way to go before many industries can return to normal.”



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