Jakarta, CNBC Indonesia – The US Bureau of Labor Statistics reported that the number of unemployed people classified as a permanent job loss rose by 345,000 in September to a 7-year high of 3.8 million.
That means what many people originally hoped for as a temporary leave of absence or temporary job loss has now become permanent due to massive business closures and company efficiency amid the Covid-19 pandemic.
The number of the labor market that is closely watched by the US government has nearly tripled after falling to its lowest level in 19 years in February, just before the pandemic erupted in the US.
This permanent increase in unemployment rates in the US also provides concrete evidence of the effects of the Covid-19 pandemic in Uncle Sam’s country, and of course globally.
“This is a bad sign,” said Austan Goolsbee, former economic adviser to President Barack Obama, quoted from CNN Business, Sunday (4/10/2020).
When a US citizen is laid off from work, the US Department of Labor then classifies the status as temporary layoff.
The layoffs (termination of employment) classified as permanent layoffs are workers who have just completed a period of temporary work and then lost their position permanently, which means that the job will not return.
The percentage of unemployed Americans classified as permanently unemployed rose to 35.6% in September, higher than the increase recorded last April of 11.1%.
“This is very worrying, not only for these people [penganggur], but also for what he said about recovery [ekonomi], “said Gus Faucher, Chief Economist at PNC, quoted by CNN.
But the good news is that the US is quickly starting to recover with an increase in the number of new jobs.
US government data noted that there were 661,000 new jobs added in September as more businesses began to reopen and take steps lockdown for health is deprived.
However, the bad news is that the labor market recovery in the US has actually lost momentum, as the effects of the pandemic hit the economy too hard.
“The easy part of the labor market recovery is largely behind us now [terlambat], “said Brian Coulton, Chief Economist at Fitch Ratings, in a note on Friday.
Now, in just the last few weeks, major companies including Disney, insurance giant AllState and Raytheon Technologies have each announced thousands of layoffs.
Goldman Sachs, an investment bank in the US, also cut hundreds of jobs after previously stopping layoffs during the pandemic.
To make matters worse, Thursday may mark the worst day of layoffs in US airline aviation history.
After failing to get more capital injection from the US government, American Airlines dUnited Airlines announced plans to cut a total of 32,000 employees.
“The economic damage is likely to become clearer in Q4 as more companies finally start giving up, reporting closings and layoffs,” wrote Seema Shah, Head of Strategy at Principal Global Investors, in a note to clients Friday.
(bag bag)
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