Unemployment Increases Modestly To 9.8%

Unemployment continued to climb in September, bringing the official number to 9.8% (seasonally adjusted), according to the Bureau of Labor Statistics. In September 263,000 jobs were lost. That failed to meet consensus expectations, which predicted only 175,000. That number was also worse than last month's decline of 201,000 jobs (which the report also revised from 216,000). This news isn't comforting.

Perhaps the most surprising statistic that I saw was government jobs down 53,000. The one "industry" said to be growing these days is government, but not according to those numbers. Scanning the report, the only sector where I saw jobs increase was health care, up 19,000.

In a picture, the unemployment trend now looks like this (from BLS):

chart 1 09-09 unemp.PNG

And the jobs lost looks like this (also from BLS):

chart 2 09-09 unemp.PNG

This is certainly a disappointing trend for anyone who thought jobs lost would continue to decrease.

Another notable oddity is that seasonally adjusted unemployment continues to move in the opposite direction of non-seasonally adjusted. If you don't adjust for seasonality, then unemployment actually decreased by 0.1%:

chart 3 09-09 unemp.PNG

How about the seasonally adjusted unemployment rate including discouraged workers? That increased by 0.1% from 10.1% to 10.2% -- the same percentage increase as the official national rate. Interestingly, however, the number of discouraged workers continues to decrease:

chart 4 09-09 unemp.PNG

Discouraged workers declined from 758,000 in August to 706,000 in September. This is beginning to look more like a trend than a blip. If there's one glimmer of hope in this unemployment report, then that's it. This decrease indicates that Americans have better confidence about the job market (despite the high unemployment), since fewer are discouraged to try to find jobs.

One more final piece of good news -- but not about unemployment. Atlantic readers continue to do better in predicting this economic statistic. The results from yesterday's poll show that 34% of respondents, the highest percentage of any other choice, correctly predicted 9.8%. So congratulations to the more than one-third of readers who got it right. Here are those results: