The latest US jobs figures are miserable, and they are going to worsen even though the September outcome showed the largest jump in job losses for five years.
The 159,000 jobs lost was bad enough, but 760,000 people in the US have officially lost employment since January, with hundreds of thousands more leaving the active work force. Millions of other workers are having their hours cut, their pay trimmed, being forced to work longer for less, or being forced to move into part time employment.
The unemployment rate of 6.1% may have been unchanged in September, hovering at about 9.5 million people. But over the past 12 months, the number of unemployed persons has increased by 2.2 million and the unemployment rate has risen by 1.4%, according to US Government figures. It marked the ninth straight month that the economy has lost jobs, according to the report from the Department of Labor’s Jobs Bureau.
The 159,000 jobs lost in September were the most since March 2003, when the labour market was recovering after the 2001 recession.
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Manufacturing lost 51,000 jobs, construction employment shrank further by 35,000 jobs, retailers cut payrolls by 40,000 workers, and the leisure and hospitality industries ended 17,000 jobs. Professional and business services saw a 27,000 drop in employment and the only two major sectors to post gains were government, which added 9000 jobs, and education and health services, in which employment grew by 25,000. US analysts say that government hiring has been strong throughout the downturn, as the private sector has now lost nearly a million jobs since December, when the cuts first became noticeable.
But in a portent of what’s to come as budgets worsen, state and local governments cut 18,000 jobs in the month, outside of education. A number of US states are close to being broke, with California talking about asking the Federal Government for an emergency $US7 billion loan.
The real weakness for the future was the drop in the average hourly work week by 0.1 hour to 33.6 hours. The average hourly pay rose just 3 US cents, but when combined with the shorter week, means that the average weekly paycheck actually fell by 81 cents to $US610.51.
That’s the bad news, the really miserable news for the US economy; at a time when consumer spending is being pressured, US consumers have less to spend on every day essentials, let alone presents and other gifts as the important holiday season approaches. That will more pressure on employment as companies face declining sales and profits
Unemployment claims hit a 7-year high last week, but the labor force figures reveal that the number of people who settled for part-time work or given up on finding a job altogether is the worst for 14 years.
American economists refer to it as the “under-employment rate” which includes those without jobs who have become discouraged and stopped looking for work, as well as part-time workers who want full-time jobs. It rose to 11% from 10.7%, the highest rate since April 1994.
The number of people working part-time jobs because they couldn’t find full-time work or because their hours had been reduced jumped by 337,000 people to 6.1 million, the first time there have been more than 6 million part-time workers wanting full-time jobs since 1993. But apart from the dislocation caused by September 11, 2001, there hasn’t been a rise in the this figure like that in September since 1983.