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Tea Leaf: More jobs, less recession risk

Published: Wednesday, Oct. 12 2011 1:50 p.m. MDT

In this Feb. 1, 2011 photo, an unemployed man takes a roll call at the Day Worker Center of Mountain View in Mountain View, Calif.

Paul Sakuma, Associated Press

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The September employment report was somewhat better than expected. September job gains, plus upward revisions to job gains during July and August, will lessen the discussion of an imminent return to recession. Our view all along has been that we will avoid another recession, although U.S. economic growth will be frustratingly weak.

At the same time, American job creation in an economy aided by massive, gigantic, and unprecedented stimulus should be much better. Too much government is part of the problem, not part of the solution.

Details

The American economy added 103,000 new net jobs during September, versus forecast expectations closer to 60,000 jobs. As we knew going into the report, 45,000 "new" jobs would simply be the return of Verizon workers to the workplace, following a strike.

Perhaps most noteworthy within the report was sharp upward revisions to previously reported job estimates for July and August. The net addition of 99,000 jobs during these two months is meaningful. July's gains were revised from 85,000 net new jobs to 127,000, while August's initial report of no ... zero ... zip ... nada jobs was revised up to 57,000 jobs.

Annual stuff

The U.S. economy — until estimates are revised again — has added 1,074,000 net new jobs to-date in 2011, an average of 119,000 monthly. Such totals compare to the addition of 940,000 net new jobs in 2010, an average of 76,000 jobs monthly.

The addition of slightly more than 2 million jobs during the past 21 months now offsets only one-fourth of the more than eight million jobs lost in 2008 and 2009 alone. There remains much to do.

The nation's unemployment rate remained at 9.1 percent for the third month in a row. The jobless rate has averaged slightly above 9 percent for the past three years.

As we will hear multitudes of times as we approach the 2012 presidential election, no president since Franklin D. Roosevelt in the late 1930s has ever been re-elected with an unemployment rate above 7.2 percent ...

... we are at 9.1 percent,

... even the best estimates for late next year are no better than 8.5 percent, with most slightly higher,

... there is a valid reason President Barack Obama is aggressively pushing a costly jobs program,

... similar reasons suggest the president will support additional employment programs during the next year,

... it ain't rocket science.

The nitty gritty

The nation's goods production sector saw the addition of 18,000 net new jobs in September, led by 26,000 new jobs in construction. The rise was the best in seven months and was led by a jump in non-residential construction activity.

The nation's mining and logging sector added another 5,000 jobs. Not so hot was the loss of 13,000 manufacturing jobs during the month, the largest decline in 13 months.

The nation's private service providing sector added 119,000 net new jobs in September, led by 48,000 new jobs in professional and business services. The nation's education and health services sector added 45,000 jobs.

The government sector lost another 34,000 jobs in September, with 24,400 of them in public education. The American Federation of Teachers notes that 277,000 education jobs have been lost since 2008, with another 280,000 more job losses likely to occur during the next year due to state and local budget cuts, according to The New York Times.

Other details

 Total unemployment remained at roughly 14 million people.

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