The U.S. economy lost 95,000 jobs in September, far worse than expectations for no change in employment. More Census-related temp jobs ended, as expected, but state and local governments slashed staff far more than predicted. So far in 2010, the U.S. has added just 613,000 jobs — for a monthly average of 68,111.
Employment bottomed in December 2009 at 129.588 million — two years after peaking at 137.951 million. At this year’s pace, the U.S. won’t recoup all those 8.36 million lost jobs* until March 2020 — 147 months after the December 2007 high.
That would obliterate the old post-World War II record of 47 months set in the wake of the 2001 recession.
The current jobs slump also is the deepest of any in the post-war era, with payrolls down as much as 6.1%. They are still 5.6% below their December 2007 level.
With state and local governments likely to shed workers for at least the next year or two as budget woes continue, the hiring burden will fall entirely on the private sector.
Private employers did add 64,000 workers last month, but that was a little less than consensus forecasts and far below what’s needed.
The U.S. needs to create 125,000-150,000 jobs each month just to absorb new workers and prevent unemployment from rising. So returning to the old peak employment a decade later would hardly suggest a healthy labor market.
(Unemployment held at 9.6% last month as the separate household employment survey reported an increase in jobs. But the underemployment rate rose 0.4 point to 17.1%, matching the 2010 high.)
The bottom line: It’s quite possible that the next recession will hit before the U.S. returns to old employment highs.
*The Labor Department said employers may have cut 366,000 jobs more than previously reported in the year through March 2010. A final estimate will be issued in February. That suggests job losses were deeper than expected in 2009 and/or early 2010 hiring was weaker than previously expected. Both would suggest an even-longer return to full employment.
