Job losses continue at a moderated pace in September. Total nonfarm payrolls shrank by 263,000 in September, according to the Bureau of Labor Statistics (BLS). September’s job losses followed monthly losses of 201,000 jobs in August and 304,000 jobs in July. The pace of job losses has moderated considerably since peaking in January 2009. During the first quarter of 2009, monthly job losses averaged 691,000, compared with 428,000 in the second quarter and 256,000 in the third quarter. Temporary help services employers shed significantly fewer jobs than in prior months during the recession, suggesting that more employers may be on the verge of expanding payrolls in the near future. Hiring in the health sector continued in September, and the real estate sector added 6,000 jobs over the month, the largest increase in nearly three years.
Preliminary benchmark revisions indicate job losses likely 800,000 higher over the recession. While the BLS is currently estimating that job losses since the start of the recession in December 2007 total 7.2 million, preliminary estimates of the benchmark revision indicate that this number is likely to be over 8 million. The BLS performs an annual revision of the Establishment Survey based on unemployment insurance tax records. The final benchmark revision will be released on February 5, 2010 with the January employment report.
Employment opportunities continue to evade unemployed workers. The unemployment rate rose 0.1 percentage point to 9.8 percent in September, and the number of unemployed workers increased by 214,000 to 15.1 million. However, the rise in the unemployment rate was tempered by the decline in the labor force participation rate, which fell 0.3 percentage point to 65.2 percent. The unemployment rate may continue to rise after the recovery begins when workers reenter the labor force. More than one-third (5.4 million, or 35.6 percent) of the unemployed have been out of work for more than 26 weeks. Of those looking for work for more than six months, half have been out of work for more than one year. In September, the typical unemployment spell lasted 17.3 weeks, considerably longer than 11.5 weeks, the peak duration during the jobless recovery following the 2001 recession. As of last month, there was little difference between the typical duration of unemployment spells for men (18.2 weeks) and women (17.9 weeks); however, the median duration of unemployment was significantly longer among black (22.5 weeks) and Asian workers (20.2 weeks), than for whites (17.1 weeks) and Hispanics (14.1 weeks). (Data on duration of unemployment for demographic groups are not seasonally adjusted.)
Real GDP stronger in Q2 2009 than was previously reported. The Bureau of Economic Analysis published its third estimate of the gross domestic product (GDP) for the second quarter of 2009, showing that GDP fell by 0.7 percent in the second quarter, rather than 1.0 percent as was previously reported. The smaller decline in GDP was due to smaller decreases in residential and nonresidential fixed investment and private inventory investment and larger increases in federal, state, and local government spending than were previously reported.
