No big surprise here — the magic 100k breached for the 2nd time. (Next up: -250k!)
The recession deniers are now all but vanquished. Looking at this
data, it is impossible to claim that the economy is expanding.
A few interesting surprises in the data:
• Weak expectations: While the loss of 159k was much worse than consensus, the fear was a 200k+ month. Look for a 250k+ monthly loss sometime over the next few months.
• Average weekly hours fell by 0.5% — the lowest level since November 2004;
• U6, the broadest measure of Unemployment, spiked up to 11% — its highest level since April 1994;
• The September ADP Employment Report once again was wildly off, expecting private sector jobs to fall by just 8k. Given the huge fall off in its accuracy, the ADP report has now become more or less irrelevant;
• The Birth/Death model added 42k jobs — somehow higher than the 29k added in September 2007. We continue to reliably assume that the real world NFP number is worse than BLS reports.
• Construction jobs down by 35k, financial
activities fell by 17k — the most in this cycle;• Of 274 industries, 38.1% were hiring in September, down from 44.7% in August.
• The services sector — the biggest
part of the labor force — lost 82k jobs;• Government, Health Care and Mining saw modest gains;
•
Long-term unemployed (jobless for 27 weeks +) rose by 167,000 to 2.0
million. This has risen by 728,000 over the past 12 months. Long-term
unemployed = 21.1% of total unemployment;• Persons working part time for economic reasons rose by 337,000 to 6.1 million in September, an increase of 1.6 million over the past 12 months;
BLS also added a special Hurricane Ike note: "It is unlikely the storm had substantial effects on the national employment estimates."
Overall, a very mediocre report.
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UPDATE: October 3, 2008 11:04am
I am glad to see that our modest proposal Unemployment Reporting: A Modest Proposal (U3 + U6) that both U3 and U6 should be reported is gaining traction:
Rex Nutting, Market Watch
http://krugman.blogs.nytimes.com/2008/10/03/the-track-record/Paul Krugman, NYT
http://krugman.blogs.nytimes.com/2008/10/03/the-track-record/
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Chart via Econompic
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Sources:
THE EMPLOYMENT SITUATION
BLS, SEPTEMBER 2008
http://www.bls.gov/news.release/empsit.nr0.htm
Payrolls sink 159,000, worst job loss in 5 years
Rex Nutting
MarketWatch, 9:09 a.m. EDT Oct. 3, 2008
http://tinyurl.com/3kpze9
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