After a rather dismal summer, today’s new jobs report from the Bureau of Labor Statistics was supposed to offer an answer to a painful question: has the economy slipped back into a recession?
Expectations going into the morning were low. Neil Irwin reported yesterday, “Analysts are expecting the data to reveal continued mediocrity — 50,000 net new jobs…. And in this age of diminished expectations, a positive number in the 100,000 range … would mean a big positive surprise.”
The new jobs numbers aren’t great, but they did reach six digits.
As an increasing number of economists have warned in recent weeks of a double dip back into recession, employers added 103,000 jobs in September, staving off the bleakest forecasts for now.
The unemployment rate for September was the same as August, 9.1 percent.
There’s one key detail that shouldn’t be overlooked: the Verizon strike in August that skewed last month’s numbers in the wrong direction by 45,000 jobs were added to the September totals. In other words, the overall total was 103,000 jobs for the month, but if one excludes the Verizon numbers, it’s really 58,000 jobs gained in September.
And that’s obviously not a good number.
In keeping with recent trends, the private sector gained 137,000 jobs in September, which certainly doesn’t sound recessionary, while the public sector lost 34,000 jobs due entirely to budget cuts at the state and local level. Republicans are eager to force more public-sector layoffs, making the jobs landscape worse on purpose, while President Obama’s American Jobs Act seeks to do the opposite.
Also note, it was slightly more encouraging to see that both of the last two months saw their numbers revised upwards, with July and August adding a combined 99,000 previously unreported jobs.
Over the last year, the U.S. economy has added 1.49 million jobs overall.
At this point, it’s probably fair to say we’re looking for relative progress. Today’s jobs report exceeded expectations, but just to keep up with population growth, the economy should be adding over 150,000 jobs a month. To bring down the unemployment rate quickly, we’d look for 300,000 jobs a month or more.
If policymakers look at the report and think, “Well, that’s not so bad; I guess we don’t need to worry about boosting the economy,” they’d be making a tragic mistake. This jobs report shows an improvement, but it’s nowhere near good enough.
And with that, here’s the homemade chart I run on the first Friday of every month, showing monthly job losses since the start of the Great Recession. The image makes a distinction — red columns point to monthly job totals under the Bush administration, while blue columns point to job totals under the Obama administration.