shinramyun
Joined: 31 Jul 2009
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 Posted: Fri Oct 08, 2010 2:06 pm Post subject: Government Cuts Led U.S. to Lose 95,000 Jobs in Month |
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The economy shed 95,000 nonfarm jobs in September, the Labor Department reported Friday, with most of the decline the result of the layoffs by local governments and of temporary decennial Census workers.
The steep drop was far worse than economists had been predicting. Most estimates were for a loss of only a few thousand jobs.
�September�s U.S. payroll report adds to the evidence that the recovery is losing what little forward momentum it had,� said Paul Ashworth, senior United States economist at Capital Economics.
The recovery that officially began in June 2009 has slowed considerably in recent months, raising concerns about the long slog the country will have to endure to dig itself out of the deepest downturn since the Great Depression. Private payrolls have been growing throughout 2009 but at a rate too sluggish to make much of a dent in unemployment. The outlook for the rest of the year is equally discouraging, economists say.
�We�re looking for companies to get more confident in the pace of recovery and start to hire around 150,000 jobs a month, which is what we need just to keep the unemployment rate flat,� said John Ryding, chief economist at RDQ Economics. �But I just don�t see that happening between now and the end of the year.�
While total government jobs fell by 159,000, private sector companies added 64,000 jobs last month. The unemployment rate, which measures the percentage of workers who are actively looking for but unable to find jobs, stayed flat at 9.6 percent.
A broader measure of unemployment, which includes people who are working part-time because they cannot find full-time jobs, and people who have given up looking for work, rose to 17.1 percent from 16.7 percent in August. This was largely because of a jump in the number of people who are reluctantly working part-time. That, coupled with the fact that the average length of the workweek has remained more or less unchanged for six months, are also bad signs for the job market over the next few months.
�A rise in the workweek would be a precursor of more hiring,� said Nigel Gault, chief United States economist at IHS Global Insight. �We�ve got no leading signal there making you think more hiring is coming.�
Of the loss in government jobs, 77,000 were temporary Census employees while 76,000 were in local governments. State governments lost 7,000 jobs, as well.
Most of the state and local jobs lost were in education, which trimmed positions as the school year began. Including private school positions, altogether 72,700 education jobs were eliminated, on net, in September.
Critics have been calling for government officials to use some of the arrows remaining in their quiver to try and speed job growth.
�Employers continue to rank sales as their most pressing problem, which points the way forward for Congress and the administration: Focus on policies that directly boost demand to get employers hiring again and pull our economy out of first gear,� said Heather Boushey, a senior economist at the Center for American Progress, a liberal research organization in Washington.
Congress, however, has been stuck in a partisan stalemate ahead of the November elections. Federal Reserve officials, on the other hand, seem to be tentatively hinting that they undertake more unconventional monetary policy measures to try to encourage hiring and ward of deflation. Many expect the Fed to act at its next meeting, which coincides with the Congressional midterm elections.
�We have more evidence of a weakening trajectory here, which will certainly weigh heavily on the Fed as we go into the November meeting,� said Prajakta Bhide, a research analyst at Roubini Global Economics. She said that markets seemed to have already priced in the assumption that the Fed would do more quantitative easing.
Meanwhile, the average duration of unemployment continues to hover around record highs, leading America�s 14.8 million unemployed to feel more and more desperate. In September, the typical unemployed worker had been searching for a job for 33.3 weeks.
�I have been unemployed for almost two years,� said Mary Carter, 38, of Coolidge Ariz. She used to work for a fencing contractor, before the housing market collapsed. �I put in for jobs, no one calls, I put in for more, no one calls.�
Her partner, Antonio Garcia, who has an electrician�s degree, recently found a part-time job in a market, after eight months of unemployment. He is paid minimum wage for 20 hours a week. �I was making $14 and now I�m making $7 an hour,� he says, holding a plastic bag of cans from a local food pantry. �They�ve just stopped building.�
The Bureau of Labor Statistics on Friday also released preliminary revisions to the model used to estimate job changes from month to month, indicating that the recovery has been even weaker than initial reported. The bureau says it expects to revise down the level of employment in March 2010 by 366,000 jobs, which means jobs gains had been about 30,000 weaker each month over the 12-month period that began in March 2009. |
http://www.nytimes.com/2010/10/09/business/economy/09jobs.html?_r=1&hp |
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