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October 8, 2010 in Business
Economy loses 95,000 jobs due to government layoffs
WASHINGTON — A wave of government layoffs in September outpaced weak hiring in the private sector, pushing down the nation’s payrolls by a net total of 95,000 jobs.
The unemployment rate held at 9.6 percent last month, the Labor Department said today. The jobless rate has now topped 9.5 percent for 14 straight months, the longest stretch since the 1930s.
The report is the final one before the November elections, which means members of Congress will face voters next month who are frustrated with an economy that is still struggling to create jobs.
The figure that may matter most is 18,000 — the number of positions lost after subtracting the 77,000 temporary census jobs that ended in September. That marks the first loss for that grouping since last December, according to economists at Nomura Securities.
Another troubling sign is a sharp rise over the past two months of people working part time but would prefer full-time work. Their ranks have increased by nearly 1 million since July, to 9.5 million, the most on records dating from 1955.
That has pushed up the so-called “underemployment” rate, which also includes workers who’ve given up job-hunting, to 17.1 percent from 16.7 percent in August.
A net total of 159,000 government jobs were lost in September. Local governments cut 76,000 jobs last month, most of them teachers. That’s the largest cut by local governments in 28 years. States cut 7,000 jobs. The rest were census jobs.
The private sector is not making up for the lost public jobs. Companies added only 64,000 jobs. That’s the fifth straight month of weak private hiring. And it’s roughly half the pace needed simply to keep up with population growth and hold down the jobless rate.
“The labor market remains far too weak to raise confidence among consumers, lift spending and in turn spur businesses to step up hiring,” Sophia Koropeckyj, an economist at Moody’s Analytics, wrote in a note to clients.
The local government job losses reflect the toll the recession is taking on state and local government budgets. Falling home values are just beginning to push down local governments’ property tax revenues. Most state and local governments are required to balance their budgets, which means drops in revenue are forcing cuts in services.
Local officials say more cuts are coming. The National League of Cities projects that local governments will cut 480,000 jobs this year and next. More jobs will be lost among private companies that do business with cities.
The weak job market makes it more likely that the Federal Reserve will take additional steps to boost the economy. Most economists expect the Fed to decide at its meeting next month to buy government debt in an effort to lower interest rates and spur more borrowing.
That expectation enabled investors to take the jobs report in stride. The Dow Jones industrial average rose 29 points in midday trading. Other indexes were mixed.
Even areas of the economy that were strong are weakening.
Manufacturers cut 6,000 jobs, the second straight month of losses. The sector drove job growth earlier this year, adding 134,000 positions in the first five months of 2010, but factory employment has been flat since then.
Construction firms cut another 21,000 jobs, hampered by weakness in commercial real estate development. Information services lost 5,000 positions.
Other sectors showed job gains: Health care added 32,000 jobs, the leisure and hospitality sector added 38,000, and retailers added 5,700. Temporary help services hired nearly 17,000 workers.
Employers, faced with slow sales and a weak economy, see little reason to ramp up hiring. The economy expanded at a feeble 1.7 percent annual rate in the April-June quarter. Most analysts think the economy will fare little better for the rest of this year.
Since the recession ended in June 2009, the economy has grown 3 percent, according to economists at Deutsche Bank. That’s less than half the average 6.5 percent pace in postwar recoveries.
The department said the economy shed 15,000 more jobs in July and August than previously estimated.
© Copyright 2010 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Seven firms or nonprofits win Agora Awards 
Albert on October 08 at 7:39 a.m.
It’s a “Mad, Mad World” when the private sector is shutting down, closing businesses, and moving offshore. The predictable outcome is of course, the government sector follows suit. We can lay “politics aside” and come to the realization that soaring debt via “stimulus” is not going to work.
CFO magazine had a very interesting main feature of how corporations are holding onto their cash and not expanding until the “Great Recession” is over. The question remains as to how are we going to experience the death of this recession and see our family, friends, and neighbors get back to work?
This is NOT a political statement, however the fact remains that as of January when the big bullet of mandatory health care hits, this will be the proverbial nail in the coffin for the corporate world. If we are going to get back to work, then serious decisions pertaining to excessive regulatory enforcement need to be made. Will the corrupt congress make these decisions, or will we continue to see ever-increasing unemployment and the irreversible offshore corporate expansion?
My family members and unemployed neighbors need to get back to work. The foreclosures need to cease. Corporations need assurance that America is still the home of the Free and the Brave. Private entrepreneurship is the dominant factor in a free enterprise economy. Free Enterprise Means FREE to do business, employ people, and enjoy prosperity. Our corrupted - money driven - power seeking combined congress & executive branch seem to have forgotten these basic models of success.
SpokaneLiberal on October 08 at 8:48 a.m.
Free to do business is bull and we all know it. A “free” market is only defensible if all costs are insulated to the transaction. That means the costs of all pollution are born by the consumer and producer. That means the education of the laborer who made the product, the healthcare of that laborer, the food for that laborer, the house for that laborer, must be paid for by the company and the cost passed along to the consumer. The cost of business fire protection, police, military defense, transportation must also be born by the business and passed on to the consumer. This is the only way capitalism can efficiently allocate resources is if all costs are born by the participants of a deal. The only way to do that is massive putative government regulation. Which means you don’t want capitalism you want corporatism.
In corporatism the corporation is free from government to do as it wants without having to pay for all of the inputs into its production. This hugely benefits huge corporations and competitively disadvantages local businesses.
The future lies somewhere in the middle.
Business cycles. It has extreme highs and extreme lows. During the highs some get rich, most do better, some do the same, and some paradoxically do worse. When the economy turns almost everyone does worse to the point that even people who were upper income lose everything. People starve. Wars erupt.
If the business cycle is allowed to run the extreme highs followed quickly by extreme lows often destabilizes society. The thing that keeps stability in the low times is government. If, as private demand shrinks, it increases demand it can keep the lows from being so low. It keeps wars from happening, it keeps people from literally starving in the streets. The stimulus and government spending keeps the Great Recession from being the Great Depression. The lows are still lows, they just aren’t quite as bad. People will still be angry, suffering happens, but it doesn’t devolve into revolution, wars, starvation, and instability.
Eventually things recover and then you cut government spending to keep the economy from overheating. You pay down debt.
It sounds good to say the stimulus didn’t add any jobs so it was a waste. However, if it even kept some jobs from being lost it is not a waste but an increase in demand.
If you want to be responsible taxpayers, good citizens, and free people it is what we have done for 30 years in good times, not bad, that have screwed us. We need to pay our debts with heavy taxes in good times and we need to close loopholes that allow corporations to benefit from our tax structure and India’s at the same time.
soccermomsusie on October 08 at 8:58 a.m.
Well, this is great news! As President Ronald Regan (#2) and President George W. Bush (#1!) both said, “Government is the problem.” And now it looks like we are making the problem smaller.
By the way, always elect people who tell you that government is the problem because they get the chance to prove themselves right :) !
If I were hiring pilots for my airline, the first pilot interviewee who says, “Airplanes suck. They always crash.” would be hired immediately as my chief pilot!
Albert, you are right. Government jobs will be next to move overseas. I am looking forward to the police trying to ticket me for texting and driving when they have to watch me from Bangalore. How about when paramedics come to my house, every week or so to pick up hubby off the floor. It will be great when these rascals have to drive up from Mexico. That’s a long way to listen to sirens!!
As far as libraries go, remember the BookMobile? I envision a BookBarge (tm) that will depart from China and make its way down the coast, up the Columbia and then the Spokane River. It will dock at the floating stage Downtown. Now that will be something to see. Kids will get their books back in time too. The Chinese know how to handle dissidents, miscreants and tardiness.
Also Albert, you are right. Corporations have it very tough these days. They have record profits but ObamaScare is ruining their lives (they are living according to the Supreme Court). Our government has it backwards. Corporations need to do whatever they can to us because that is the way God wants it. Government needs to back up corporations in this pursuit, not hamper them their rightful place as our God-given Overlords (benevolent). IT’S IN THE BIBLE!!!!
My prediction? Corporations have plenty of money to hire more people (ObamaBailouts and record profits). They won’t hire anyone until we do their will and vote Republican. That is why they are outspending the Demoncrats 10 to 1. As soon as the GOP (God’s Overlord’s Party) gets back in control, corporations will reward Americans again by giving them some kind of little job.
In essence, they are taking the money given to them by the Libertard Demoncrats and financing elections to rid themselves of the Libertard Demoncrats! It almost reads like scripture!!
W AGAIN IN 2010!!
HEAR OUR VOICE!!!!
UncommonSense on October 08 at 10:10 a.m.
Spokane liberal,
Quit using Karl Marx as your inspiration. He was proved wrong and Obama is taking things south also.
SpokaneLiberal on October 08 at 10:27 a.m.
Uncommon Sense.
My inspiration was not Marx. It was capitalist economic theorists like John Maynard Keynes, Abba Lerner, and Nicholas Johannsen. Read what I post. It isn’t an advocacy of government taking over business but that all costs and benefits have to be insulated to the participants of a deal. This is actually classical capitalism justification.
Corporatism, as advocated on here with people “free” from having to pay for all the inputs and reaping more benefits than the deal entitles them to is actually far closer to communism than what I advocate. Shareholders are merely the workers controlling the means of production via Marx. The “benefits” (aka profit) of the “society” aka corporate shareholders must be maximized even if that results in bad things. That is the new communism and a fact of the global corporate empire.