Jobs Report Underscores Weak Recovery
Nonfarm employers cut payrolls by 263,000 in September, above economists' estimates of around 175,000, while the unemployment rate rose to 9.8%, up a tenth of a point from August.
The market reaction to the employment release on Oct. 2 was muted, perhaps because equity losses and Treasury-market gains in the previous session signaled Wall Street's expectations for a weak report. Stocks erased earlier losses to trade flat and bonds pulled back from session highs in late morning trading.
"If it's a recovery, it's a very anemic recovery," said Hugh Johnson, chairman and chief economist of Johnson Illington Advisors, a money manager in Albany, N.Y.
Adding to the bearishness, the government said that even among people who do still have jobs, the average workweek shrank fractionally. Production and nonsupervisory workers on private nonfarm payrolls edged down by 0.1 hour to 33 hours per week, according to the Bureau of Labor Statistics. Their average pay went up one penny per hour, to $18.67.
U-Shaped Recovery Predicted Consumer spending won't lead the economy to recovery as long as the labor market remains so weak, said Kurt Karl, chief U.S. economist for Swiss Re, the reinsurance company. Picturing the shape of a graph of output, Karl said: "Going forward, it's clearly not a [V-shaped] recovery at this point. It's very much a [U-shaped] recovery."
Not only is the current situation worse than expected, but the history of the past few years has been downgraded. As part of its annual data-revision process, the government said it preliminarily concluded that 824,000 fewer Americans had jobs in March than it had previously believed. That's a downward revision of 0.6%.
Some other key points in the monthly jobs report:
The largest job losses were in construction, manufacturing, retail trade, and government.
Unemployment rates were 10.3% for adult men, 7.8% for adult women, 25.9% for teenagers, 9% for whites, 15.4% for blacks, 12.7% for Hispanics, and 7.4% for Asians.
The number of people out of work for at least half a year rose by 450,000 to 5.4 million.
A broader measure of unemployment that includes people who have stopped looking for work or are working part-time for economic reasons rose to 17% from 16.8% in July.
Construction employment declined by 64,000. Employment in manufacturing fell by 51,000. Retail jobs fell by 39,000. Government employment was down by 53,000.
On the plus side, employment in health care continued to increase in September, up 19,000 for a total gain of 559,000 jobs since the beginning of the recession.