The September jobs report points to “a higher risk of recession,” as more Americans become long-term unemployed, according to S&P Global U.S. Chief Economist Beth Ann Bovino. She spoke with Yahoo Finance’s Alexis Christoforous and Brian Sozzi.

Video Transcript

ALEXIS CHRISTOFOROUS: Let's bring in Beth Ann Bovino now, US Chief Economist at S&P Global. So Beth Ann, you had a little time to look-- to look at these numbers. Can you point to anything positive in this jobs report that gives you hope, perhaps?

BETH ANN BOVINO: Well, what's positive is they're up. That's good to-- good to know. And so we did get some of those 22 million jobs-- some of them back to the market. Of course, though, that means that half of those 22 million jobs that were lost because of COVID-19 are still not there, and that's a real concern.

BRIAN SOZZI: Beth Ann, is the recovery over?

BETH ANN BOVINO: We don't see that just yet. Obviously, we-- but we do have a real-- a higher risk of recession. We have it at 30% to 35%. Knowing that COVID-19, at least the new cases, have started to come down, that's a positive. But the real risk we have, of course, is these people that are-- who are unemployed are now going into the long-term unemployed terrain, which means they're harder to come back. And it doesn't look like, at this point, that fiscal stimulus is in the offing, and that's a real concern for those people who need those benefits to survive.

ALEXIS CHRISTOFOROUS: Beth Ann, for people waking up looking at this report, they go, oh, look, the unemployment rate fell from 8.4% to 7.9%, isn't that good news? But explain for folks why that might not be. Because we had the participation rate fall.

It ticked down for men. It fell even more for women. Does this show that people are just simply not rejoining the workforce, they're giving up on the job search, which is something you don't want to see in the middle of a recovery?

BETH ANN BOVINO: Well, a couple of points I want to make on that. One is that if you look at the initial jobless claims, they remain over 800,000. That-- that's three times larger than the historic-- going a five-year historic average pre-crises. If you look at, as you mentioned, the labor participation rate, that continues to climb lower. I believe Fed Chair Powell had said that adds-- that adds 3 points to that unemployment rate.

So that means that-- that under-- that 7.9% unemployment rate is kind of pushed-- it's skewed to the downside, artificially. It's probably closer to 10%, or even higher. Then I would also like to point out that a lot of people are long-term unemployed now, and that's a real concern, because of-- when you're unemployed for that long, your skills atrophy, or even if they don't atrophy, businesses start to think they did. And that's a real struggle, and it becomes structural.