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Worth the Wait? Delayed Private Sector Jobs Report Below Forecasts

The White House attributes the deterioration in the labor market to the early October shutdown and threat of a possible default

| BY Donald Liebenson

A key government economic report, delayed two-and-a-half weeks by the government shutdown, finds that the U.S. economy added a less-than-forecast 148,000 private sector jobs in September. Economists had estimated that the 180,000 jobs were added last month.

The U.S. Bureau of Labor Statistics private sector jobs report is usually released on the first Friday of every month. The 16-day shutdown and subsequent gridlock over the debt ceiling while lawmakers tried to reach a partisan solution has eroded employer and consumer confidence. A new CNN poll finds that just 29 percent believe that the economic conditions are good, a drop of 4 percent since late September before the shutdown.

The unemployment rate ticked down to 7.2 percent from 7.3 the previous month, but analysts attribute this in part to the unemployed giving up on finding a job, which means they would not be counted among the still-active job-seekers.

There were 11.3 million unemployed persons in September. Among the major worker groups, the unemployment rates for adult women (6.2 percent, the lowest since December 2008), whites (6.3 percent), adult men (7.1 percent), Hispanics (9 percent), blacks (12.9 percent) and teenagers (21.4 percent) showed little or no change from the previous month, the BLS reports

The labor participation rate—the ratio of those actively employed or looking for work to the overall eligible population—was also little changed at 63.2 percent.

In September, the number of those who have been jobless for 27 weeks or more was 4.1 million, a drop of 140,000. These “long-term unemployed” accounted for 36.9 percent of the unemployed. The number of “involuntary part-time workers,” persons who were employed part-time because their hours had been scaled back or because they were unable to find a full-time job, was also unchanged at 7.9 million.

Last month, 2.3 million persons were marginally attached to the workforce, meaning they were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. These individuals are not counted as unemployed because they had not searched for work in the four weeks prior to the survey.

Among these individuals, there were 852,000 “discouraged workers.” These individuals are not currently looking for work because they believe there are no jobs available for them. The remaining 1.5 million persons marginally attached to the labor force in May had not searched for work in the four weeks prior to the survey for reasons such as school attendance or family responsibilities, the BLS said.

Revised employment figures for July and August combined were 9,000 more than previously reported.

The White House attributed the deterioration in the labor market to the early October shutdown and threat of a possible default and noted in a statement that private sector employment has risen for 43 consecutive months, with businesses adding a total of 7.6 million jobs over that period.

In breaking down gains in the private jobs sectors, the BLS reports that employment in professional and business services rose by 32,000. Over the past 12 months, employment growth in this industry averaged 52,000 jobs per month.  Construction rose by 20,000 in September after showing little change over the prior six months. Private sector jobs in the wholesale trade rose by 16,000. Over the past year, this industry has added an average of 7,000 jobs per month. Transportation and warehousing added 23,000. Most of this increase is attributed to transit and ground passenger transportation.

Total job creation needs to be between 250,000 and 300,000 to lift the economy and significantly lower the unemployment rate, economists say. The November private sector jobs report, scheduled for release on Nov. 1, will be delayed a week because of the shutdown.

About the Author

Donald Liebenson

Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.  

A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.