WASHINGTON — Total nonfarm payrolls fell more than economists expected in September, declining by 95,000 jobs as cash-strapped state and local governments cut headcounts by the most in 28 years, the Labor Department reported Friday.
The unemployment rate remained at 9.6%. Private nonfarm payrolls rose 64,000.
Economists expected total nonfarm payrolls to be flat for the month and private payrolls to increase by 75,000, according to the median estimate from Thomson Reuters. They saw unemployment rising to 9.7%.
Diane Swonk, chief economist at Mesirow Financial, indicated the apparent “stabilization” is due to idle workers abandoning their job hunts, rather than more hiring.
Average hourly earnings for private-sector production and non-supervisory employees rose 0.1%. The average workweek was unchanged at 33.5 hours. Local government payrolls fell 76,000 in September to post the sector’s largest drop since July 1982. They are down 212,000 jobs, to 14.248 million, in the first nine months of 2010. Nonfarm payrolls were revised lower for August and July to losses of 57,000 and 66,000, respectively.
The preliminary annual benchmark revision showed a decline of 366,000 workers, as private-sector jobs fell by 371,000, while public-sector employment rose by 5,000.
The revisions suggest the recovery is weaker than thought, Swonk said.
“It looks like another 366,000 people than was initially reported lost their jobs,” she said, noting that the previous revision adjusted the payroll estimate for the recession down by 824,000 jobs.
The economy needs to create 115,000 to 125,000 jobs per month to accommodate new workers, said JPMorgan’s Anthony Chan.
