WSJ: Economists say more awful jobs reports to come
  • The employment report is just the latest in a series of indicators showing that the economy was deteriorating rapidly as the third quarter progressed. These include weak retail sales, weak auto sales, declining durable goods orders, and a sharply weaker ISM manufacturing survey. The economy was on the way down even before the latest tightening in the credit crunch. This underlines that the purpose of the rescue package being debated in Congress is damage limitation – minimizing the extent of the recession. –Nigel Gault, Global Insight
  • The U.S. economy is shrinking, and there will be many more awful reports like this. Payrolls were weak everywhere except government and education; big change is in services, down a huge 82,000, way below the -15,000 prior trend. Note that the core unadjusted numbers even worse than the headline; the seasonal was 80,000 better than September last year. –Ian Shepherdson, High Frequency Economics
  • A weak report, with no evident impact of a strike at Boeing (aircraft manufacturing unchanged) and apparently limited hurricane effect on employment along the Gulf of Mexico (the Labor Department Commissioner’s summary statement indicated that Hurricane Ike “did not substantially impact the payroll employment estimates.”) Job losses were widespread, and weakness in retail (-40,000) and leisure & hospitality (-17,000) speak directly to pressures on consumer spending. –Alan Levenson, T. Rowe Price
  • The Labor Dept indicated that it is “unlikely” the hurricanes had a “substantial effect” on payrolls noting that the storm hit near the end of the survey period. However, the “not at work due to bad weather” series contained in the household survey spiked to 189,000 versus 34,000 in August and 20,000 last September. This gauge is not directly applicable to the payroll data, but we have long found that it is good proxy for weather-related influences on payrolls. The September reading is close to what we had been assuming and thus we continue to believe that the hurricanes probably subtracted close to 50,000 from the payroll tally. Some of the job losses that resulted from the hurricanes are likely to reappear in October, but this effect is likely to be more than offset by the fallout tied to the Boeing strike and further underlying deterioration in labor market conditions. –David Greenlaw, Morgan Stanley
  • A good portion of the service sector declines occurred with respect to the transportation industries, and those job losses are likely to be much more than just a cyclical shift. As our economy continues to adjust to the long-term reality of $100 oil, we can expect to see more structural job declines in the transport sector. Financial sector job losses meanwhile sunk to -17,000, though we remain concerned that many of the layoffs aren’t being captured in these numbers–the data simply do not match the headlines. –Guy LeBas, Janney Montgomery Scott
  • The collateral effects of the recent turmoil in the credit markets will likely make the job losses even larger next month. So far this year, 760k jobs have been lost. The economy has clearly slipped into a jobs recession because the housing meltdown and credit market turmoil has spread to the broader economy. Persistent job losses have probably pull the overall economy into recession as well. –Stephen A. Wood, Insight Economics
  • The increase in unemployment The increase in unemployment would have been larger but for a 121,000 drop in the labor force. The augmented unemployment rate, which adjusts for marginally attached workers (i.e. those who would like a job but are not actively looking) rose to 9.1% from 8.9%. –RDQ Economics
  • As we and others have pointed out on many occasions, the birth-death model employed by the BLS is serving to understate the true extent of job losses in the private sector – the model added 42,000 private sector jobs in September and over the past 10 months has added 801 thousand private sector jobs (not seasonally adjusted). Over the nine months that total employment has declined, the total job losses add up to 760,000. –Richard F. Moody, Mission Residential