Nonfarm payrolls dropped 95,000 last month and the unemployment rate was unchanged at 9.6%, the Labor Department reports. That’s bad. But it’s not as bad as it seems because the trouble was due primarily to the government, which laid off workers—159,000 fewer government jobs overall last month. So much for employment stimulus from big brother. But if we focus on private-sector jobs, the net change in September reveals a rise of 64,000. That’s good. It’s not great, and in the grand scheme of the business cycle it’s disappointing. But it could be worse. In fact, it might turn worse in the months ahead for all we know. But the trend in job growth for corporate America is still up at the moment.
September’s rise in private new jobs is the ninth consecutive month of positive change. Since February, the for-profit realm of the economy has minted almost 900,000 new jobs. That’s a sluggish pace by America’s historical post-recession standard, but for the moment it’s all we have. As the chart below shows, it’s a trend of sorts with a modest positive bias. Still, no one will be inspired from this chart. The falling pace of net job creation in particular is worrisome. Add it to the list of macro issues weighing on the outlook.
“The private-sector growth is somewhat heartening but in total you have to expect that state and local and government jobs are going to be a drag for a number of months and perhaps a number of quarters,” Bill Gross, co-chief investment officer at Pimco, tells Bloomberg today.
Government, it seems, is the problem rather than the solution in the labor market, at least it has been in recent months. Otherwise, more of the same is on tap for the economy. “While economic growth is expected to remain positive, the pace of growth over the next year and a half is not likely to be sufficient to meaningfully improve the unemployment rate from its currently elevated level,” says economist James Marple of TD Bank via AFP.
Andrew Leonard speaks for many when he complains that “this is not what recovery looks like.” Whatever you call the current climate, the question is whether it’s a prelude to a new recession? Probably not, at least not in the foreseeable future, but it’s still too close to say for sure. The current economic trend is about as sluggish as it can be without a double dip scenario. That’s too close for comfort, but it’s not obvious that it’s about to change any time soon.