U.S. economy gained 661,000 jobs in September, as the economic recovery slows

In what will be the last monthly jobs report issued before the election on Nov. 3, the unemployment rate dropped to 7.9%, putting the rate closer to that of other recessions.

"The jobs number is positive but it's flashing warning signs," said Ernie Tedeschi, a former Treasury Department economist. "It's decelerating fast, and that worries me. If jobs growth is slowing, it's going to take us longer and longer to recover from this recession."

The modest gains in jobs were driven by hiring increases in leisure and hospitality, which added 318,000 jobs back in September, mostly at restaurants and bars. Retail added back another 142,000 jobs, driven in part by hiring at clothing stores.

Government employment fell by 231,000, driven by declines in local and state education, a decline economists have been warning about for months.

The decline in the September unemployment rate was also driven in part by a drop in the labor force participation rate, meaning that because many unemployed people gave up looking for work, the labor force shrank and the remaining unemployed were a smaller share of the workforce, Tedeschi said.

The unemployment crisis continues to disproportionally affect Black, Latino, and Asian workers and women. Whereas the unemployment rate for White workers is 7%, it is 12.1% for Black workers, 8.9% for Asian workers, and 10.3% for Latino workers.

Also, the unemployment rate is 7.4% for all men 20 years and older, and 7.7% for women 20 years and older.

There are still 10.7 million fewer people with jobs than there were in February before the pandemic, though just over half of the jobs lost in March and April have now been recovered. At this rate, it would take the economy another 16 months to gain back those jobs, although economists say that job gains get more difficult for every month that the recession lasts.

The economic report, based on a survey which is taken during the first half of the month, comes on the heels of a string of warning signs for the economy.

Several companies have announced wide scale layoffs in recent days, including Disney, American and United Airlines, and Allstate.

And unemployment claims, which have remained above historic records every week since the worst of the pandemic, show that job losses remain an ever present threat to the push to bring the economy back.

Permanent job losses increased in September jobs report by 345,000, part of a rise of 2.5 million of these longer-lasting losses since February.

Economists warn that without further government assistance for businesses and households, the economy is at risk of sliding backward.

The coronavirus remains a persistent threat to the economy. State and local governments and businesses have struggled with plans to reopen the economy, and public health officials are worried that another spike in the virus this year could constrain the recovery even more.

The news that President Donald Trump and first lady Melania Trump had tested positive sent the stock market tumbling on Friday.

The jobs report continues to be affected by a misclassification error that had skewed earlier reports, according to the Bureau of Labor Statistics. If not for the error, the unemployment rate would have been 8.3%, four tenths of a percentage point higher.