Grim economy news: Jobs numbers shrank in September

McClatchy NewspapersOctober 6, 2010 

WASHINGTON — U.S. employers shed more jobs in September than had been expected, according to two closely watched surveys, released Wednesday, that cast a shadow over the government's official September jobs report, which is due Friday.

Private non-farm payroll employment fell by 39,000 jobs last month, according to the ADP National Employment Report. That was somewhat surprising, because the consensus forecast of mainstream economists had called for a gain of about 20,000 jobs.

"I think this is a disappointing result," said Joel Prakken, the chairman of Macroeconomic Advisers, which crunches payroll data to issue the monthly report. "Economic growth slowed pretty much in the middle of the year … and we think the fourth quarter is going to be a quarter of slow economic growth."

The ADP report doesn't measure public-sector jobs. The Labor Department's Bureau of Labor Statistics does, and its report Friday for September will be the last one before congressional elections Nov. 2. It's now expected to be quite soft.

That's because state and local governments face enormous budget pressures and are laying off workers. In addition, temporary hires for the 2010 census are still leaving the government payroll.

Construction jobs dropped by 28,000 in September, the ADP report says. Since its January 2007 peak, the construction sector has shrunk by 2,297,000 jobs.

Other losing sectors in September included manufacturing, down 17,000 jobs, and financial services, down 13,000.

The ADP report would have been even weaker if not for a slight uptick of 6,000 jobs in the services sector. "There's also weakness when you slice the data by size of payroll: 14,000 jobs lost in small business payrolls, 14,000 in medium-sized payrolls and another 11,000 in large. So whether it's by sector or by size, the numbers are weak," Prakken said.

There's little hope for serious hiring gains the rest of this year.

"We are expecting quite modest growth in employment through the end of the year and into next year," Prakken said. "It won't surprise me at all if the unemployment rate ticks up from its most recently reported 9.6 percent to something like 9.8 or 9.9 by the end of the year."

The International Monetary Fund seconded that glum view, issuing its revised global forecast Wednesday. It cut its U.S. growth forecast for 2010 to 2.6 percent, down from 3.3 percent in its July forecast, and said the rate was likely to slow further in 2011, to a 2.3 percent annual rate.

In another widely tracked report issued Wednesday, job placement firm Challenger, Gray & Christmas Inc. says that September layoffs rose 7 percent. Its monthly layoff survey reports that employers announced plans to cut 37,151 jobs during the month, more than in August, but the second lowest total of the year.

From July through September, employers announced planned layoffs that affected 113,595 jobs. That's 53 percent lower than the 240,333 job cuts announced in the same three months last year, Challenger said. Almost a third of the job cuts announced in September came in government and nonprofit organizations.

"The low job-cut numbers we are seeing in almost every sector do not necessarily translate into increased hiring. There is hiring going on in the economy, but it is not enough to make a discernable dent in the number of unemployed," John Challenger, the CEO of the group, cautions in the monthly report.

ON THE WEB

ADP report

Challenger report

IMF forecast

MORE FROM MCCLATCHY

Tidal wave of outside money swamping 2010 elections

In Florida, judge attempts to get handle on foreclosure problem

Obama hails community colleges, skirts their lack of funds

McClatchy's probe into roots of financial crisis, a Pulitzer finalist

To ask a question about this story or any economic question, go to McClatchy's economy Q&A

McClatchy Newspapers 2010

McClatchy Washington Bureau is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service