159,000 Jobs Lost Last Month. We Need Economic Stimulus Now

by Tula Connell, Oct 3, 2008

Some 159,000 jobs were lost in September, the largest monthly drop in five years and the ninth straight month—in all of 2008—the U.S. economy lost jobs.

This from Bloomberg business news service:

The world’s largest economy may be headed for bigger job losses as the worst financial meltdown since the Great Depression causes consumers and companies to retrench.

The U.S. Department of Labor report released today also shows the unemployment rate remained at 6.1 percent, largely due to the large number of jobless workers who no longer are counted because they have given up looking for work. In addition to the 9.5 million workers who meet the Labor Department’s official definition of “unemployed,” another 6.1 million are working part-time because they can’t find full-time work, and half a million have given up looking for a job.  

Economist Dean Baker, co-director of the Center for Economic Policy Research, says the unemployment rate likely will exceed 7 percent by early 2009 and notes the jobs report “should remove any lingering doubts that the economy is in recession.”

As AFL-CIO President John Sweeney says, today’s jobs numbers “should set off alarm bells at every level” and indicate the need to

pass an economic stimulus and real reform for working people along with any bailout bill. Like financial institutions, the middle class is collapsing. Across the country, more and more workers are facing long-term unemployment with little hope for finding any job, let alone one that pays the bills.

Sen. Barack Obama, Democratic candidate for president, strongly supports an economic recovery package. Following this morning’s jobs report, Obama said:

Instead of Sen. McCain’s plan to give tax breaks to CEOs and companies that ship jobs overseas, I will rebuild the middle-class and create millions of new jobs by investing in infrastructure and renewable energy that will reduce our dependence on oil from the Middle East. I also call on Congress to pass an immediate rescue plan for our middle-class that will provide tax relief, save one million jobs, and save our local communities from harmful budget cuts and painful tax increases.

Sen. John McCain opposes a stimulus package for working families and did not take part in the Senate vote on the first stimulus bill last spring.

As bad as the new jobs data are, the underlying picture is even bleaker because the number of long-term unemployed workers (those jobless for more than six months) grew to 2 million in September, an increase of 728,000 over the past 12 months. A recent Economic Policy Institute (EPI) report showed that in July there were an average of 2.6 job seekers for every available job—an increase of more than 60 percent from just a year and a half ago, when there were just 1.6 job seekers for every job opening. 

The unemployment rate for adult men grew by half a percentage point (to 6.1 percent) and for African Americans, it increased by eight-tenths of a percentage point (to 11.4 percent) in September. The greatest September job losses occurred in manufacturing (51,000 jobs, bringing the total for the past 12 months to 442,000), construction (35,000 jobs, and more than 600,000 lost in the past two years) and retail (82,000 jobs). 

The worsening U.S. trade deficit is one key factor behind the job loss. In 2007, 5.6 million jobs were lost or displaced by the U.S. non-oil trade deficit, according to data released yesterday by the EPI. Despite strong export growth over the past few years, the U.S. trade deficit still totaled $700 billion in 2007, nearly double what it was when George W. Bush took office. More than 4 million (70 percent) of the jobs displaced by this trade in 2007 were in manufacturing.   

In fact, manufacturing activity plummeted in September at the fastest pace in more than two decades to its lowest level since immediately after the Sept. 11 terror attacks, a report out Wednesday said. According to USA Today: 

A number of economists said the data, which showed sharp declines in manufacturing orders, production, employment and exports, confirmed the economy is contracting. “If anyone doubted the U.S. economy was in recession, this report pretty much seals the deal,” says PNC Financial Services chief economist Stuart Hoffman.

Print This Article | E-Mail This Article |Comments (6)