The economy added 103,000 jobs in September, but a separate report on announced future layoffs doesn’t bode well for short-term improvements in the nation’s employment picture.
The unemployment rate held steady at 9.1 percent, according to a report issued this morning by the U.S. Bureau of Labor Statistics (BLS). The private sector added 137,000 jobs as government employment continued to fall, based on a monthly survey of employers.
The growth in nonfarm payroll employment was slightly better than economists had predicted but still below the rate of growth necessary to reduce the unemployment rate. In addition, August’s dismal zero growth report was revised to add 57,000 jobs, while July job growth numbers were revised from 85,000 to 127,000.
The September jobs report benefited in part from the return of about 45,000 Verizon workers who had been on strike in August. The strongest sectors for job growth were in professional and business services, up by 48,000; health care, up 44,000; and construction employment, up 26,000.
The economy, however, continues to face stiff headwinds in growing jobs as announced future layoffs surged in September to the highest level in more than two years, according to a separate report issued by outplacement firm Challenger, Gray & Christmas.
In addition to September declines in government employment (34,000), manufacturing employment fell by 13,000.
The number counted as unemployed remained unchanged at 14 million, with 6.2 million of them out of work 27 weeks or longer, according to a separate monthly household survey issued by the BLS.
An additional 2.5 million persons were marginally attached to the labor force but were not counted among the unemployed because they had not looked for work in the previous four weeks. One million of that total were counted as discouraged workers who have given up hope of finding employment, according to the BLS.
Mariann Montagne, senior investment analyst at Marks Group Wealth Management in Minnetonka, sees some progress.
“We’re seeing the average work week expand, and with that, we’re seeing an average increase in wages, which is very encouraging.” she said.
“I think that helps mitigate some fears that were evident in last month’s numbers when spending growth was ahead of income growth,” which should benefit companies dependent on personal consumption, she said. Stocks of Target (NYSE:TGT) and Best Buy (NYSE:BBY) were both up early in trading, along with other consumer-heavy stocks such as Ford (NYSE:F) and Macy’s (NYSE:M).
“What is not encouraging is to see 9.1 percent unemployment. Obviously we need stronger job growth,” Montagne added.
In terms of planned layoffs, Challenger, Gray & Christmas reported that eEmployers announced plans to shed 115,730 workers from their payrolls at some point down the road, 126 percent higher than the 51,114 announced in August, and 212 percent higher than September 2010.
The increase in future mass layoffs was driven by 54,182 government-sector cuts in September, 50,000 of which are the result of a five-year troop reduction plan announced by the U.S. Army, the Chicago-based firm reported earlier this week.
To date, U.S.-based employers have announced 479,064 planned layoffs in 2011, a 16.5 percent jump from the same point last year, when job cuts totaled 411,272, with one-third of the announced layoffs coming from government employers. Last month’s total is the highest since April 2009, when 132,590 job cuts were announced.
The second largest job-cutting sector to date is the financial sector, which announced 54,013 planned layoffs between Jan. 1 and the end of September. That is up 177 percent from the 19,474 job cuts recorded over the first three quarters of 2010. Of the 54,013 financial job cuts this year, 31,167 occurred in September, with 30,000 resulting from Bank of America’s multi-year workforce reduction plan aimed at saving the struggling bank $5 billion per year.
The September surge brought the total job cuts announced in the third quarter to 233,258, the highest quarterly toll since the third quarter of 2009.
Minnesota’s September employment report is scheduled for release Oct. 20.