September Jobs Report Worst in Over Four Years

http://www.bls.gov/news.release/empsit.nr0.htm

The September jobs report (link provided above), released on Friday by the Bureau of Labor Statistics (BLS), was just about as bad as it could be for an economy not officially in recession.  The headline numbers – 142,000 jobs created and an unemployment rate that held steady at 5.1% – weren’t great.  Expectations had been for an increase of 203,000 jobs.  But those headline numbers mask just how horrible this report was.

For beginners, the tally for July and August was also cut by 59,000 jobs.  Also, the average work week declined and average hourly earnings actually fell by one cent.  But here’s where it gets really bad:  the employment level – the number of Americans working – the numerator in the calculation of the unemployment rate – actually fell by 236,000.  That’s, the biggest decline since June, 2011, when the economy was struggling to claw its way out of recession.

So if the employment level actually fell by 236,000 in September, then how did unemployment remain unchanged?  You guessed it – the same old trick the Obama administration has used throughout – the magically disappearing work force.  According to the BLS, the civilian labor force actually declined yet again by 350,000.  That’s the second consecutive monthly decline and the sixth in the last twelve months.  Year-to-date, according to the BLS, the civilian labor force has actually declined by 465,000 in spite of the fact that the U.S. population has grown by over a million people.

Truth be told, unemployment actually rose slightly in September to 8.8%.  Per capita employment remains stuck at 46.3% (more than two percentage points below its pre-recession level), where it has been all year.  Here’ the chart:  Per Capita Employment.  And the number of unemployed Americans rose by 62,000 to 14,395,000.  Here’s the chart:  Unemployed Americans.

Finally, thanks to the BLS chicanery with the labor force statistics, the Detachment from Reality Index – the difference between the official unemployment rate and real unemployment rate – rose to a record level of 3.77 points in September.

This jobs report paints a picture of an economy that’s slipping back into recession, something that we won’t know for sure until GDP data for the 3rd quarter is released later this month.

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