Payrolls fall by 159,000 in U.S.
The unemployment data came out for the month of September 2008 in the U.S. Payrolls fell by 159,000, but the unemployment rate remained the same at 6.1%. The data are consistent with recent weekly unemployment claims data, which point to a weakening employment outlook in the United States.
The Bureau of Labor Statistics (BLS), which releases the data, produced this summary of the employment situation:
Nonfarm payroll employment declined by 159,000 in September, and the unemployment rate held at 6.1 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Employment continued to fall in construction, manufacturing, and retail trade, while mining and health care continued to add jobs.
Note that the BLS collects data in two different ways, through a survey of U.S. households (the Household Survey) and through a survey of businesses (the Establishment Survey). The unemployment rate and the number of people unemployed that we hear on TV and read in newspapers comes from the household survey. The non-farm payrolls number showing the number of jobs the economy lost or gained comes from the establishment survey. Hours worked and average pay data also come from the establishment survey.
Just yesterday, we saw that the weekly claims data were pointing to a deteriorating employment situation in the U.S.. Now, this data has been confirmed by the monthly unemployment report. When looking at the data, I like to look at year-on-year comparisons to see the change in employment, as this is more predictive of recession than the actual employment level. You can see in the charts below that the change in employment is consistent with recession.
*The gray lines on the charts indicate periods of recession
Employment Situation Summary, U.S. Bureau of Labor Statistics