Friday, October 7, 2011

September Employment: Partly Cloudy

The BLS reported today that employers added 103,000 people to their payrolls in September, of which 45,000 were workers returning from the Verizon strike.  That's not a great number - due to natural growth in the labor force and productivity improvements, the economy needs to add roughly 130,000 jobs per month just to keep the unemployment rate from rising.  But in light of fears that the economy could be sliding into recession due to the hits on confidence from the debt ceiling fiasco and Europe's woes, a continuation of the pattern of sluggish employment growth may be somewhat of a relief.  Also, July employment growth was revised up from 85,000 to 127,000 and August was revised from 0 to 57,000.
The numbers from the household survey (which has a smaller sample, so is considered less reliable) were more encouraging.  The unemployment rate held steady at 9.1%.  The number of people employed rose by 398,000, but the reason that didn't bring the unemployment rate down is that the labor force grew by 423,000 and the labor force participation rate ticked up to from 64.0% to 64.2%.  The unemployment rate is measured as a percentage of the labor force, and to be counted as in the labor force, someone must report that they are working or looking for work, so this is a sign that people are re-entering the labor force, which may mean that they are more encouraged about prospects of finding a job.

Overall, the economy remains in a deep hole, with nearly 14 million people unemployed, 6.2 million of whom have been out of work for 27 weeks or longer.  Government continues to be a drag on employment (i.e., the exact opposite of what it should be doing); government payrolls fell by 34,000 in September.  The BLS noted that local government employment has fallen by 535,000 since September 2008 (more on this from Floyd Norris).

On a non-seasonally adjusted basis, the unemployment rate fell to 8.8% in September and payroll employment rose by 519,000.  That is, September is a month that normally sees an improvement in the employment picture, which is removed by the seasonal adjustment factor.

More reaction: Calculated Risk, Mark Thoma, RTE's round up of Wall St. "economists".

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