News In Brief

Jill Schlesinger: Reason to smile today, but jobs crisis far from over

Jill Schlesinger Oct 7, 2011

The September jobs report is out and it was better than last month, when I complained that President Obama blew it on jobs. The Labor Department said the U.S. economy added 103,000 jobs last month (and the previous two months were revised higher by 99,000), the unemployment rate remained at 9.1 percent and 14 million Americans are still out of work.

Before we all get too excited about the report, let’s be clear: there is still a jobs crisis in America. Since April, there have been an average of 72,000 jobs per month created, a level that isn’t strong enough to keep pace with new entrants to the workforce. We need to see 200,000-250,000 new jobs created consistently to put a dent in the unemployment rate.

Additionally, the unemployment rate has been 9 percent or higher in every month but two since the recession ended in June 2009. That’s the longest such stretch since World War II and nearly one-third of the unemployed — nearly 4.5 million people — have had no job for a year or more. That’s a record high and more than double the previous peak after the 1981-82 recession.

What’s going to move the needle on job creation? I think the answer lies in confidence. According to Brian Hamilton, CEO of Sageworks – a financial information and research company, “privately-held companies, which create up to 80 percent of new jobs, are selling more this year – sales are up for these companies by approximately 5-6 percent over last year.” Yet, they are still not hiring in big numbers. Hopefully, as sales increase and global uncertainty diminishes, they will get more comfortable and start creating jobs.

Until that time, the September report puts pressure on Congress to act on President Obama’s $447 billion “American Jobs Act,” which Senate Democratic propose should be paid for with 5.6 percent surtax on incomes of more than $1 million a year to pay for the job-creation plan. I wondered just how some of the millionaires felt about that tax and was surprised to hear the following comments from a few of the rich folks that I know:

  • “Please don’t use my name, because some of my co-workers will be furious with me and I wouldn’t be able to show my face at the club, but I would be OK with it.”
  • “It would totally suck, but of course I understand it. The thing I don’t like is feeling like the President makes me the enemy.”
  • “In a word: ugh!”

All three of these people work on Wall Street, which may be of interest to the Occupy Wall Street protesters. Maybe the one percent is more willing to step up to the plate than we think.

September Jobs Report:

  • Jobs Created: +103,000 (August revised from +85,000 to +127,000, July revised from 0 +57,000)
  • Private Sector Jobs Created: 137,000 (including 45,000 striking Verizon workers who returned to work)
  • Unemployment Rate: 9.1 percent (unchanged from August)
  • Under-Employment Rate (marginally-attached, part-time): 16.5 percent (from 16.2 percent in August)
  • Total Number of Unemployed: 14 million (unchanged)
  • Average duration of unemployment: 40.5 weeks (new record high)
  • Number of years to return to pre-recession employment (assuming current level of job creation): 4 (late 2014 or early 2015)
  • Total Jobs Lost since beginning of recession in 2007: 6.7 million
  • Long-term unemployed (jobless for 27 weeks and over): 6.2 million (from 6 million in August, representing 44.6 percent of the total unemployed)
  • Average Hourly Earnings: up $0.4 to $23.12 (Over the past year, earnings are up 1.9 percent)
  • Average Workweek: up 0.1 to 34.3 hours
  • Government: -34,000 (eleventh consecutive month of job losses. Over 535,000 total government jobs lost since peak in September 2008)

Jill Schlesinger is editor-at-large for CBS/Moneywatch. Listen to her Morning Report interview for more analysis, and visit her CBS blog for more coverage.

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