The U.S. economy lost another 159,000 jobs in September, as companies in the world's largest economy continued to cut expenses to protect profits in the face of the economic slowdown. It was the largest monthly job loss in five years.However, U.S. Labor Department officials cautioned that the September job loss total was skewed artificially higher by Hurricanes Gustav and Ike, which resulted in more job losses in the Gulf States region. Further, the unemployment rate remained the same at 6.1% in September, the Labor Department said.
However, an alternate gauge of unemployment, which includes discouraged workers, rose to 11% in September from 10.7% in August. The conventional U.S. Labor Department unemployment rate does not include discouraged workers because they are not technically 'seeking work.' Still, some economists argue the discouraged metric is a more-accurate gauge of unemployment, contending that these discouraged workers would accept jobs if the positions were available.
Also, the number of adults working part-time because no full-time job was available increased by 337,000 to 6.1 million in September.
Economists surveyed by Bloomberg News had expected the U.S. economy to shed 100,000 jobs in September. September was the U.S. economy's tenth straight monthly job loss. The U.S. economy lost a revised 73,000 jobs in August and 67,000 in July. Further, the U.S. economy has now lost 760,000 jobs this year and more than 800,000 since the job slump started in late 2007.
Economist Peter Dawson told BloggingStocks Friday the September report represents another indisputable negative data point for the U.S. economy.
"The job market continues to worsen. We must discount jobs losses for Hurricanes Gustav and Ike, many of which should come back as Texas and Louisiana rebuild, but the end result is that it's just more bad news on top of weak U.S. economic fundamentals," Dawson said. "For the U.S. economy to turn around, the job picture has to turn around because job losses are causing many home foreclosures, at the core of what's hurting the economy."
In September, manufacturing lost 51,000 jobs, business services lost 27,000, and financial service positions declined by 17,000. Meanwhile, health care added 17,000 jobs and government positions increased by 9,000.
Further, Dawson said unemployment, if the current job loss trend continues, is likely to exceed 6.5% by early 2009. "A lot will depend on the credit situation. If we can prevent a long-term contraction in credit, job loss totals may be less than projected," Dawson said. "But right now, the bias is toward steadily worsening unemployment with job losses through at least March-April 2009."
Economic Analysis: Obviously, a very poor September jobs report. Companies continue to belt-tighten amid a pullback in consumer spending and business investment. Moreover, the current credit crunch will only worsen business conditions, endangering more jobs, which underscores the need to stabilize financial markets to keep credit flowing at levels acceptable for a diversified, major industrial economy.
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