U.S. Unemployment Worsens to 9.8 Percent, More Jobs Lost Than Expected

by Tula Connell, Oct 2, 2009

U.S. job loss worsened in September, with 263,000 lost, moving the official unemployment rate from 9.7 percent to 9.8 percent and underlining how the nation’s economic crisis is a jobs crisis. The new data out today by the U.S. Department of Labor means some 15.1 million workers have lost their jobs since the recession began in December 2007.

The official 9.8 percent unemployment rate is bad enough, but a more realistic—and horrible—picture of what’s really going on in this nation is the unemployment data that includes those not counted in the official figure, such as those who have given up looking for work: That’s a stunning 17 percent unemployment rate—some 26 million workers who need jobs or full-time work but cannot find it.

Workers in construction and manufacturing were the hardest hit last month, with 64,000 jobs lost in construction and another 51,000 in manufacturing. Government jobs declined by 53,000 and retail jobs declined by 39,000. Employment in health care is one of the few bright spots, with jobs increasing in September by 19,000.

To return the labor market to pre-recession conditions by September 2011, employment would have to increase by an average of 538,000 jobs every month between now and then, according to the Economic Policy Institute (EPI).

There are now six job-seekers for every job available and more than one-third of the 15 million unemployed workers have now been without a job for more than 27 weeks..

Not good news. Worse, unless Congress and the Obama administration take action, the jobs situation will not get better for many years-maybe not until 2017, according to a new report released Wednesday.

“America’s New Post-Recession Employment Arithmetic,” calls the lack of job growth over the past 10 years, “The Lost Employment Decade.” From The New York Times:

Noting that there are 1.256 million fewer private-sector jobs than in December 1999, it said the nation was “destined to exit the decade with fewer jobs than when it began.”

To return to the labor market conditions of 2007, the report said the nation would not only need to offset the 1.3 million annual increase in the labor force, but would also need to compensate for the job losses suffered during the recession. Given conservative estimates of further declines in employment, the Rutgers professors see an overall employment deficit of 9.4 million private-sector jobs by December 2009.

And right now that “employment deficit” means six jobless workers for every one job opening.

Economists say that while the economic recovery act prevented total economic disaster, with job losses far less each month now than they were six months ago, the hole in the labor market is now so huge that it will require enormous, sustained levels of growth to fill it any time soon. The administration should continue to extend unemployment benefits for unemployed workers and bolster aid to budget-constrained states and cities. Further, the administration must speed public investment in education and training, repairing our nation’s deteriorating infrastructure, and building a greener economy.

Pollster Geoff Garin, who released survey results taken by Peter D. Hart Research this week showing voters see unemployment and the lack of jobs as the economy’s biggest problem, said he encounters a disconnect between his travels beyond the Beltway and his work inside it.

When you get out of Washington, the economic hardship and misery is hard to resist. For many people in Washington, people here feel comfortable talking about jobs as a “lagging economic indicator.” But for many people out in the U.S., it’s not a lagging indicator but a reality.

A painful reality. One that 83 percent of the people polled in the Hart survey say is a big problem.

Consumers became less optimistic about the economy in September, according to figures released Sept. 29 by the Conference Board. This from the Daily Labor Report (subscription required):

The consumer confidence index retreated 1.4 points to 53.1 (1985 = 100) following a 7.1-point gain in August to 54.5, as revised, the New York-based non-profit organization said. September’s decline was driven largely by a weaker assessment of the current economic climate. “[C]onsumers viewed both current business conditions and the labor market less favorably than last month,” said Lynn Franco, director of the board’s Consumer Research Center.

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