I had a few minutes to catch up with former managing director at Salomon Smith Barney and now current AEI economist Desmond Lachman (see our past interview here) on the latest jobs report that came out today. I was able to ask him a few questions on the state of the U.S. economy, a potential stimulus package, and the impact on small businesses. Here is what we discussed:
Today, the September jobs report shows 661,00 new jobs added last month with the unemployment rate falling to 7.9 percent? Is this good news? Not enough progress? What is your reaction?
Today’s job numbers were disappointing and were worse than most analysts were expecting. They clearly show that job creation is slowing and they confirm the Federal Reserve’s fears that the economic recovery is running out of steam as the positive effects of the first stimulus package is wearing off.
One reason to be particularly concerned about this slowing in job creation is that we are yet to recover 11 million of the jobs that were lost in the early stage of the pandemic. Another reason to worry is that health experts are warning that we could be on the cusp of a second wave in the pandemic that could result in a rolling back in the lifting of some of the lockdown restrictions in recent months.
While at least far from the numbers we are far from the worst days of the Coronavirus jobs crisis, how can we make more jobs come back at a faster rate? Say getting a stimulus bill passed?
There would seem to be two ways to improve the jobs outlook. The first would be to get another fiscal stimulus package approved that would be better targeted than the first stimulus package. The second would be to get a better handle on the pandemic. The last thing that the U.S. economy now needs is the reimposition of some elements of the earlier lockdown.
The impact on small businesses has been devastating. Just traveling through rural Maryland and Pennsylvania recently, I saw so many closed mom and pop businesses boarded up that likely are done for. How can we help small businesses now that have survived so far?
Small businesses could be helped by an effective stimulus package that revived the overall economy and that included elements of direct support to those businesses. Small businesses would also be the ones that would most benefit from bringing the pandemic under control, especially since so many of those businesses are in the service-related sectors of the economy.