Posted on 08 Oct 2010
The Labor Department reported on Friday that the economy overall lost a total of 95,000 jobs, which is far worse than expected and down from the previous month, when employers shed 57,000 jobs.
Government job losses, especially temporary census positions, have dragged down the overall number for several months. But in September, sweeping cuts by cash-strapped state and local governments accounted for more than half of the public sector losses.
The government shed a total of 159,000 workers in September, of which 77,000 were census workers. But there was also a surprising jump in job cuts at the state and local level, with a total of 83,000 jobs lost -- the worst decline since 1982.
Of those, 58,000 cuts were teachers and other education workers, as school started back up in September amid budget crises in several states.
"Normally teachers are brought back on in August and September, but because of budget pressures, fewer teachers were hired this year," said Mark Vitner, senior economist with Wells Fargo.
The overall payroll numbers for the year have been distorted by the huge spike in hiring caused by the addition of 564,000 census workers in the spring, and the end of those temporary jobs since then.
But when census jobs are stripped out of the total, September was the first month of 2010 that saw a decline in jobs.
Economists took some comfort in the report's private payrolls number, which showed businesses are hiring, albeit at a snail's pace.
Private businesses added 64,000 workers in September. It marked the ninth straight month the private sector added jobs, but was a slowdown from the previous two months.
"We're not losing jobs, but we're not gaining at a high enough rate to make a dent in the employment problem either," said Stephen Bronars, senior economist with Welch Consulting.
Economists say they need to see a gain of about 150,000 jobs per month, just to keep pace with population growth.
The government also revised its figures from both July and August lower, showing that 15,000 more jobs were lost over the summer than previously reported.
Overall, Friday's jobs report disappointed economists, who were expecting no change to the payrolls number.