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Payrolls Decline by -216K, Unemployment Rate Moves Up To 9.7

September 4th, 2009 Michael McDonough

Payrolls in the US fell by -216K in August compared to a revised decline of -276K in July, and a consensus forecast of -200K.  The unemployment rate for the month increased to 9.7% versus 9.4% a month prior, and a consensus forecast of 9.5%.  The decline in payrolls continue to moderate, but an increase in the labor force caused the unemployment rate to rise from 9.5% to 9.7%.  9.7% is the highest unemployment rate since 1983, and the US economy has now lost jobs for 20 consecutive months.  Equity markets gave up pre-release gains on the news, but have since begun to show signs of renewed strength.  I still anticipate that given sustained, albeit slowing, increments in the unemployment rate it will top 10% prior to recovering.  This data also indicates that the employment sector continues to face strong headwinds, and a consumer lead recovery remains highly improbable.  But, it is important to keep in mind that increments in employment tend to be a lagging indicator of an overall economic recovery.

Source: BLS

Source: BLS

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