Non-Farm Payrolls Down 95K In September

We knew the number was going to be worse than expected thanks to the weak ADP report. However, it was not as bad as some forecasters had expected. The estimate for private sector growth was about +75,000 and the number came in at +64,000. Not nearly enough to start making a dent in the unemployment rate. For that you would have to have around 150,000 jobs per month at the very least. I don't expect that to happen any time soon. An interesting tidbit from the report was that state and local governments are really starting to lay off workers. This should put continued pressure on the unemployment rate because this sector has historically hired a lot of people regardless of economic conditions. One troubling aspect of the report was that 41% of unemployed workers have been out of work for 27 weeks or more. To me this indicates that we could facing structural/permanent unemployment like Europe.

Don't expect the dismal employment situation to change anytime soon. Most forecasts predict unemployment to rise in 2011. There is no catalyst for new job creation in the US. QE is not the solution, but is politically popular. From the BLS:

Nonfarm payroll employment edged down (-95,000) in September, and the unemployment rate was unchanged at 9.6 percent, the U.S. Bureau of Labor Statistics reported today. Government employment declined (-159,000), reflecting both a drop in the number of temporary jobs for Census 2010 and job losses in local government. Private-sector payroll employment continued to trend up modestly (+64,000).

The jobless rate was unchanged at 9.6 percent. Of the 14.8 million unemployed, 41.7 percent had been jobless for 27 weeks or more in September, about the same as in August. The employment-population ratio held at 58.5 percent in September. Among the employed, however, the number of involuntary part-time workers rose by 612,000 over the month to a series high of 9.5 million.

The markets of course love the number because it makes QE 2 150% assured. But remember, the market is only going up in nominal terms which may make people feel better, but leaves them flat to down in real terms.
 
Black Swan Insights
 
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Non-Farm Payrolls Down 95K In September