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Friday, October 2, 2009

Unemployment: Even Worse than the Headlines

FT Alphaville reports:

Employers cut more jobs than forecast in September, sending the unemployment rate to 9.8 per cent — the highest since 1983 — compared with 9.7 in August.

Data released on Friday by the Labor Department in Washington showed US payrolls fell by 260,000, while the numbers for August were revised to a decline of 201,000. The revisions subtracted 13,000 from payroll figures previously reported for August and July.

Economists polled by Bloomberg had forecast a drop of 175,000 in September after a 216,000 decline initially reported for August. Estimates ranged from decreases of 260,000 to 100,000, Bloomberg said. Economists polled by Reuters expected a loss of 183,500 jobs and an unemployment rate of 9.8 per cent.

Unfortunately, it was even worse than that. The chart below (and as Barry points out is also an optical illusion as the X-axis doesn't look horizontal) shows that the headline 9.8% unemployment figure would have been even worse had the number of those 'not in labor force' not spiked (the unemployment rate is a measure of unemployment / labor force).

And women which had been doing relatively better than men as they tend to be in the more stable servicing jobs? Not so much in September.

Source: BLS