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5 Stocks to Gain as Jobless Rate Falls for Fifth Straight Month
Tirthankar Chakraborty
5 min read

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According to the U.S. Bureau of Labor Statistics, unemployment rate dropped 0.5 percentage points to 7.9% in September, the lowest amid the coronavirus pandemic. Jobless rate not only declined more than anticipated but fell for the fifth consecutive month. It’s worth pointing out that the rate touched 14.7% in April, when the pandemic had peaked before subsiding.

 

Notably, the U6 rate that mostly includes a wider group of people also dropped to 12.8% in September from 14.2% in August. The drop indicates that there are lesser number of people searching for jobs. Per the U.S. Bureau of Labor Statistics, nonfarm payrolls increased by 661,000 in September followed by an upwardly revised employment in August to 1.49 million. In July, the job additions were raised to 1.76 million.

 

Yes, job additions in September were less than what analysts had expected, primarily due to lesser number of jobs in the field of education. With most schools opting for online education amid the pandemic, a fewer number of teachers, cafeteria workers and bus drivers were needed. Yet, barring education, job additions have been more or less broad-based. Leisure and hospitality lead the way with 318,000 new jobs in September. Similarly, retailers, professional businesses and manufacturers hired 142,000, 89,000 and 66,000 people, respectively. In fact, manufacturers have been able to recover almost half the jobs lost during the early stages of the pandemic.

 

In the past few months, the employment trend has been encouraging. Since May, nearly 11.4 million jobs have been recovered. Lest we forget, the U.S. economy lost a whopping 23 million jobs at the beginning of the coronavirus outbreak.

 

Some critics may, however, say that the near-term trend isn’t that encouraging. For instance, airliners continue to lay off thousands of workers amid the pandemic. But there is some hope! Speaker Nancy Pelosi recently appealed airliners to delay job cuts and promised to pass a legislation at the earliest that will provide relief to both airliners and their workers. Prominent airliners like American Airlines and United Airlines also assured to recall employees if lawmakers take necessary steps.

 

By the way, the count of Americans filing for unemployment benefits dropped recently. In the week ending Sep 26, jobless claims fell by 36,000 to 837,000. What’s more, the four-week moving average that evens out instabilities in weekly reports dropped by 11,750 to 867,250. The drop in the number of people filing for unemployment benefits indicates that America’s job scenario is improving. In unison, the Conference Board added that the percentage of consumers who believe that jobs are abundant increased to 22.9% in September from 21.4% in August. Conversely, the percentage of those who claim jobs are hard to find slipped from 23.6% to 20.0% (read more: US Consumers Gain Confidence In Economy: 5 Winners).

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