Deepening gloom

2 October 2009 By Martin Hutchinson

The big 263,000 drop in nonfarm payrolls was not the only bad news. Shorter working hours and a big downward statistical revision show the US economy is in a recordbreaking hole. Recent signs of strength look like artificially stimulated blips. True recovery is far off.

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Nonfarm payroll employment declined 263,000 in September; July and August declines were revised up by a net 13,000 jobs. The unemployment rate rose from 9.7% to 9.8%.

Since December 2007, 7.2m jobs have been lost, compared with 2.1m in the recession of 200102, 1.7m in 199091, 2.0m in 198182 and 2.0m in 197475. The unemployment rate has risen by 5.4 percentage points since May 2007, compared with a 2.2, 2.8, 5.1 and 4.4 percentage points in the most recent recessions.

In September, employment in construction declined 64,000; in government the fall was 53,000, in manufacturing 51,000 and retail trade 39,000. Healthcare employment increased by 19,000. The average workweek declined by 0.1 hours to 33.0 hours, the lowest for this cycle.

The preliminary estimate of the annual benchmark revision of the size of the employed workforce, to be included with the January 2010 unemployment data showed a downward adjustment of 824,000 to nonfarm employment (0.6% of the total); the average benchmark revision over the last 10 years has been plus/minus 0.2%.

US factory orders were down 0.8% in September, but up 0.4% excluding transportation.

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