After the death of Apple's founder and visionary, the Bureau of Labor Statistics release on the September employment situation is only the second-most distressing Jobs-related news of the week. The headline number: 103,000 jobs added in September and an unemployment rate of 9.1 percent.
A few thoughts on the numbers behind the number.
1. Long Live the Conservative Recovery. We've been banging this drum about the "conservative recovery" for several months, and this report shows it in very plain and stark relief. In this expansion, companies are increasing their payrolls while state, local and federal governments are trimming theirs. This trend would be much more pronounced if not for the tens of billions of dollars in stimulus funds given to states to patch up budgets. So, in September, the private sector added 137,000 jobs — decent but nothing to write home about -- while the government sector cut 34,000 jobs. Since January 2010, the private sector has added 2.556 million jobs while government has cut 503,000. In January 2010, 82.6 percent of payroll jobs were in the private sector; today, the total is 83.2 percent. Declining government spending has been, and continues to be, a contractionary economic force.
2. Through a Mirror, Brightly. Hindsight may not be 20/20, but it is a bit rosier. Every month, when BLS reports data, it goes back and revises the numbers reported in the previous two months. And as has frequently been the case over the past couple of years, BLS found a bunch of extra jobs upon further review. July's job growth, first reported in August as 117,000 and then revised lower in September to 85,000, was revised up to 127,000. August's job growth total, originally posted as a big fat zero, was revised up to 57,000. On net, then, the Bureau of Labor Statistics discovered 99,000 jobs that it hadn't noticed or found in previous months. (Of course, we shouldn't get too excited about these figures. In August, the strike of Verizon workers knocked down the payroll jobs figure by 45,000; when the strike ended, those jobs were added back to the September total).
3. Double-Dip? These figures give ammunition to those who believe the U.S. economy is not yet in double-dip recession territory. And they help make sense of some of the positive data we've seen on consumer spending. Car sales grew nicely in September. Thomson Reuters says same-stores sales at the 23 big retailers it tracks were up 5.1 percent in September 2011 from last year, putting a cap on the best back-to-school shopping season since 2006. It could be that people are spending some of the savings they've piled up in recent years. In recent months, the savings rate has dipped below 5 percent. Or they could be piling up large balances on credit cards.
But the reality is this: Taking the long view, compared with September 2010, there are 1.78 million more private sector payroll jobs and 1.49 million more payroll jobs overall. In September, more people worked than did in August, and they worked a bit longer and for slightly higher wages -- reversing the trends of August. The average workweek for private sector workers rose by .1 hour, while average hourly earnings for private sector workers rose .2 percent, and average weekly wages rose .46 percent. More people are working than a year ago, for more hours, and at higher wages, and for more hours — that tends to translate into a higher level of consumer spending.
Still, the numbers are stark. This is nowhere near an acceptable level of job growth for an economy of this size and with this much slack. The metrics in the report, particularly from the household survey component, remain pathetic: an unemployment rate of 9.1 percent, 6.2 million people employed for more than 27 weeks, an employment-population ratio at an anemic 58.3 percent.
In the accompanying interview, The Daily Ticker's Aaron Task talks to Tig Gilliam about what these numbers mean and how the long-term unemployed can best cope in this difficult job market.
Anybody in Washington who has hair should feel as if it is on fire. The bald ones and the folks with receding hairlines — our Federal Reserve Chairman, our president and our legislators — should act as if they have hair, and act as if it, too, is on fire.
Daniel Gross is economics editor at Yahoo! Finance.
His most recent book is Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation
- Bureau of Labor Statistics
- Bureau of Labor Statistics