Employers Slash 159,000 Jobs in September
The job losses were deeper than expected. Wall Street economists surveyed by the media had forecast 100,000 jobs would be cut.
The new job figures also revealed that the nation’s unemployment rate held steady at 6.1 percent as hundreds of thousands of people left the workforce for a range of reasons.
Friday’s report marks the ninth straight month that the economy has lost jobs. The tightening job market reflects problems reverberating throughout the economy, such as a credit crunch and a crisis on Wall Street continuing to unfold over bad mortgage bets.
“The economy is now sliding down the slippery slope of recession,” economist Ken Mayland, president of ClearView Economics, told the Associated Press.
The White House called the latest employment report disappointing “but not unexpected given the shocks to the economy,” adding it also served as reminder that Congress needs to complete action on a $700 billion financial bailout.
The report likely will add new pressure on members of the U.S. House of Representatives working to hammer out a deal on the bailout plan. The Senate passed a version of the rescue deal earlier this week.
The 159,000 jobs lost in September were the most since March 2003, when the labor market was still trying to get back on its feet after being pummeled by the 2001 recession.
Job cuts were nearly across the board industry-wise in September, with the exception of government, which added 9,000 jobs.
Manufacturers cut 51,000 jobs, construction companies axed 35,000 jobs, retailers got rid of 40,000 positions, business services shed 27,000 and financial services slashed 17,000 positions, with securities and investment firms accounting for 8,000 of those reductions, the report showed, according to the AP.
“The U.S. consumer is in major trouble, with wage and salary income growth evaporating, credit extremely tight or unavailable, home prices continuing to decline, and food and energy costs consuming a large share of household budgets,” Joshua Shapiro, an economist at MFR, a research firm in New York, told the New York Times.
Some analysts, however, did see some signs of improvement in the numbers.
David Watt, a senior currency strategist with RBC Capital markets in Toronto, told Reuters it was moderately encouraging that the overall unemployment rate, which is compiled from a separate survey, did not jump higher.
“I don’t think there’s any doubt that the labor market has weakened, but it’s not deteriorating quite as quickly as the headline indicated,” Watt said.