South By North Strategies, Ltd.

CHAPEL HILL (October 8, 2010) – The national employment report for September offered little evidence that a labor market recovery is underway. Last month, employers eliminated 95,000 more payroll positions than they added. An expected fall in temporary census employment drove much of the decline; after accounting for it, the economy lost 18,000 positions.

“There was little positive news in the September employment report,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Payroll employment fell even after accounting for the expected elimination of 77,000 census jobs. While private-sector employment levels appear to have stabilized, reductions in public-sector payrolls appear are weighing down the labor market.”

In September, the nation’s employers shed 95,000 more payroll positions than they added. Losses occurred primarily in the public sector (-159,000) due to the elimination of 77,000 temporary census jobs and 76,000 local government positions. When census reductions are excluded, the economy lost 18,000 positions. Additionally, the payroll employment numbers for August were revised downwards; with the revision, the economy lost 57,000 jobs in August rather than the 54,000 positions first reported.

The largest private-sector losses in September occurred in construction (-21,000, primarily in non-residential construction), followed by manufacturing (-6,000). The greatest gains occurred in leisure and hospitality services (+38,000); education and health services (+17,000); trade, transportation and warehousing (+16,000); and professional and businesses services (+14,000, primarily in the temporary help services sub-industry).

“The September employment report offers little evidence that a meaningful labor market recovery is underway,” noted Quinterno. “Job growth simply is not occurring at a level capable of accommodating all those individuals who wish to work.”

Weak conditions were reflected in the September household survey. Last month, 14.8 million Americans (9.6 percent of the labor force) were jobless and seeking work. Proportionally more adult male workers were unemployed than female ones (9.8 percent vs. 8 percent). Similarly, unemployment rates were higher among Black (16.1 percent) and Hispanic workers (12.4 percent) than among White ones (8.7 percent). The unemployment rate among teenagers was 26.3 percent. Unemployment rates for most of these categories were unchanged from the prior month.

Furthermore, newly available data show that 8 percent of all veterans were unemployed in August; the rate among veterans who had served since September 2001 was 10.2 percent.

“There remains a tremendous amount of idle labor in the American economy,” added Quinterno. “Compared to a year ago, a smaller share of the civilian population is participating in the labor force. The proportion of the population that is underemployed also has risen. In September, the underemployment rate equaled 17.1 percent, up from 16.7 percent in August.”

Jobs remained difficult to find in September. Last month, 41.7 percent of unemployed workers had been jobless for at least six months with the average spell of unemployment lasting for 33.3 weeks. Both the number of people working part time for economic reasons and the number of people marginally attached to the labor force rose in September.

“Recent reductions in temporary census jobs and local government positions have exposed just how weak the labor market really is,” observed Quinterno. “While private employers are not slashing jobs at the ruthless pace of late 2008 and early 2009, they are not adding positions in the aggregate. Little suggests that this pattern is about to change.”