The monthly employment report for September was released this morning and the number that gets attention is minus 95,000. But that's not the most significant number. Why? Because the government shed 159,000 positions, mostly temporary Census workers, distorting the figures.
The most relevant number continues to be private sector job growth. The good news is the streak is alive. The private sector has added jobs every month in 2010 and in 10 of the past 11 months dating back to November 2009. The bad news is that the pace of new jobs in the private sector isn't enough to rev up the economy. There were 64,000 new jobs added in September, based on initial estimates, and the August and July figures were revised upward to 93,000 and 117,000, respectively.
What do all those numbers mean? In the context of 14.8 million people unemployed and another 9.5 million people that are working part time even though they'd rather work full time, you can see that the current pace just isn't going to move the needle on unemployment.
Even for those with jobs, the growth in income is anemic. Average hourly earnings increased just 1.7 percent in the past year, and only one cent -- yes, one penny -- in the past month. Not exactly a recipe for consumers to start spending, is it?
With unemployment high, job growth still sluggish and incomes stagnant, consumers will continue to clutch their pocketbooks tightly. Interest rates will remain very low and if the Federal Reserve has their way, will go even lower. This type of employment report only underscores the idea of the Fed printing more money to pump into the bond market and drive interest rates lower. But that doesn't mean people will be any more willing to borrow.
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