The nation's worst job slump in generations continues. The U.S. economy lost 263,000 jobs in September, the Labor Department announced Friday, with the nation's unemployment rate rising to 9.8 percent from 9.7 percent, the highest rate since the early 1980s.
A Bloomberg News economists survey had forecast a loss of 170,000 jobs in September and the unemployment rate to hit 9.8 percent. The economy shed a revised 201,000 jobs in August, down from the previously-released 216,000; however, July's job loss total was revised higher, to 304,000 from 276,000. During the recession -- the nation's longest since the end of World War II -- the U.S. economy has lost a staggering 7.3 million jobs, and has shed jobs for 21 straight months.
Further, every major sector except health care experienced a decline in jobs last month. In September, the service sector lost 147,000 jobs, manufacturing lost 51,000, construction jobs decreased by 64,000, and retail lost 39,000 jobs; the health care sector, which has been the one solid job-growth area over the past year, added just 3,000 jobs in September.
What's more, a separate unemployment gauge, which includes workers who can find only part-time work and discouraged workers, rose to a record 17.0 percent in September from 16.8 percent in August.
In addition, total hours worked declined by 0.5 percent, with the average workweek falling to 33 hours -- an all-time low. Also, average hourly earnings rose only 1 cent to $18.67.
How to create jobs: Differing views
Amid the recession, the nation's think tanks have had decidedly different views regarding how to end the job drought.
The Heritage Foundation, a conservative Washington, D.C.-based organization, said a program of tax cuts -- as contrasted with the tax increases it expects will stem from proposed health care reform legislation -- would stimulate the economy, increase entrepreneurial activity, and create jobs.
Conversely, The Brookings Institution, a liberal Washington, D.C.-based think tank, said the $786 billion fiscal stimulus has helped put a floor under the economy, arguing that commercial conditions, particularly consumer spending, would have retreated even further without the fiscal initiative.
In September, the number of officially unemployed Americans rose to 15.1 million. What's more, of these, a record 35.6 percent have been out of work longer than six months.
No question, this is a setback on the employment front -- a poor jobs report. September came in considerably worse than expected, and the much-hoped-for downward revision in previous monthly job loss totals netted only 13,000 fewer jobs lost. Further, while the report won't likely change the U.S. economic recovery narrative, it will renew concern about when job losses will end and job creation will resume. To be sure, the nation's period of financial crisis-induced 'mega' job-loss months (400,000 or more per month) is over, but the reality is the economy is still shedding a lot of jobs. Hence, although the recovery is under way, there is still much work ahead, from a macro policy standpoint, to find the engines of growth that will create the 150,000 to 200,000 job-gain months the U.S. economy needs to reduce unemployment and expand prosperity.
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