 | Private sector adds jobs for the ninth consecutive month in September |
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Implications: The headline drop in payrolls in September was all due to government. Private sector jobs increased. Private payrolls, which are calculated using a survey of employers, expanded for the ninth consecutive month. So far this year, private payrolls are up at an average monthly rate of 96,000. Meanwhile, the household survey, which is calculated by knocking on people's doors, showed employment rose by 141,000 in September. So far this year, household employment is up 205,000 per month, for a total gain of 1.8 million jobs. Although total hours worked in the private sector were unchanged in September, they were revised up for August. Workers' total cash earnings are up at a 4.4% annual rate so far this year, enough for consumer spending to keep moving upward while also leaving room for households to pay down debt. Benchmark revisions show that payrolls for the twelve months up to March 2010 are likely to be revised down by about 366,000. However, this has zero impact on the change in payrolls in the past six months. In more recent news, new claims for jobless benefits declined 11,000 last week to 445,000. We continue to believe that initial claims have been elevated by a loss of government jobs, not further weakness in the private sector. Declining government jobs are a negative for those individuals and families affected directly, but a positive for the economy overall.
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