#1 Employers in U.S. Cut More Jobs Than Forecast in September10-09-2010, 12:42 PM
Timothy R. Homan, On Friday October 8, 2010, 8:30 am EDT
The U.S. lost more jobs than forecast in September, reflecting a decline in government payrolls that shows the damage being done by rising fiscal deficits.
Employers cut staffing by 95,000 workers after a revised 57,000 decrease in August, Labor Department figures in Washington showed today. The median estimate of economists surveyed by Bloomberg News called for a 5,000 drop. The unemployment rate unexpectedly held at 9.6 percent.
Private payrolls that exclude government agencies climbed 64,000, less than forecast, underscoring the concern expressed by some Federal Reserve policy makers that the rebound from the worst recession since the 1930s has been too slow and may require easier monetary policy. Economists surveyed by Bloomberg project unemployment will average at least 9 percent through 2011, which may restrain consumer spending, the biggest part of the economy.
“The pace of this employment rebound has been quite sluggish,” Steven Wood, president of Insight Economics LLC in Danville, California, said before the report. “Employers are still very cautious about hiring.”
Projections of 83 economists for the unemployment rate ranged from 9.6 percent to 9.8 percent after the 9.6 percent rate reported in August. Estimates for private payrolls ranged from no change to an increase of 110,000.
The Labor Department today also published its preliminary estimate for the annual benchmark revisions to payrolls that will be issued in February. They showed the economy may have lost an additional 366,000 jobs in the 12 months ended March 2010. The data currently show a 1.7 million drop in employment during that time.
Longest Since 1948
The jobless rate has equaled or exceeded 9.5 percent for 14 consecutive months, surpassing the 13-month period from mid 1982 to mid 1983 as the longest span of elevated joblessness since monthly records began in 1948.
The decrease in overall payrolls reflected a 77,000 decline of temporary workers hired by the government to conduct the decennial population count and a 49,800 drop in teaching jobs at the local government level.
The unwinding of census employment has distorted the payroll figures for months as the government dismissed workers as the count winds down. For that reason, economists say private payrolls, which exclude government jobs, are a better gauge of the state of the labor market. Only about 6,000 census workers remain on the payrolls, indicating September may be the last month the jobs data will be distorted.
Manufacturing payrolls decreased by 6,000 after declining 28,000 a month earlier. Economists projected a 2,000 increase for September.
Employment at service-providers decreased 73,000. Construction companies subtracted 21,000 workers and retailers hired 5,700 workers.
Average hourly earnings were little changed at $19.10, today’s report showed.
Government payrolls decreased by 159,000. State and local governments reduced employment by 83,000, while the federal government lost 76,000 jobs.
The average work week for all workers held at 34.2 hours.
The so-called underemployment rate -- which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking -- increased to 17.1 percent from 16.7 percent.
The number of temporary workers increased to 16,900 after adding 17,700 in August. Payrolls at temporary-help agencies often slows as companies seeing a steady increase in demand take on permanent staff.
The economy grew at a 1.7 percent annual pace in the second quarter after expanding at a 3.7 percent rate in the first three months of the year and 5 percent at the end of 2009, according to the Commerce Department.
Fed policy makers are debating how to deploy tools for more unconventional easing as some
officials indicated action may be needed to lower unemployment.
“Further action is likely to be warranted unless the economic outlook evolves in a way that makes me more confident that we will see better outcomes for both employment and inflation before too long,” New York Fed president William Dudley said in an Oct. 1 speech, a day after Fed Chairman Ben S. Bernanke said in a statement that the central bank has a duty to aid the economy.
The Standard & Poor’s 500 Index surged 8.7 percent last month, making it the biggest September gain since 1939, amid speculation the world’s largest economy will avoid slipping back into recession and bets that the Fed will buy more debt to support the recovery.
Voters are increasingly skeptical of the Obama administration’s economic policies heading into November elections that will determine which political party leads Congress. Obama’s job approval over a three-day period that ended Oct. 5 was 43 percent, compared with 53 percent at the same time last year, according to a poll from Princeton, New Jersey-based Gallup Inc.
While some companies are still firing employees, others are recalling workers. American Airlines, the third largest U.S. airline, plans to recall 545 flight attendants and 250 pilots to meet demand for international flights as it begins it begins an alliance with British Airways Plc and Spain’s Iberia.
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