The Bureau of Labor Statistics of the U.S. Department of Labor has just released the latest labor force numbers for the U.S. economy. In September 2008, 159,000 jobs were lost and this was before the after-effects of Hurricane Ike were taken into account as well as the fallout from the stock market meltdown on Black Monday, September 29th.

U.S. Full-time Employment is Down by One-and-a-half Million Jobs
The big picture on U.S. job losses can be summarized quite easily according to three key measures. (1) Total employment is down by half a million (-519,000) versus September of last year. (2) Total employment is down by three-quarters of a million (-760,000) since the start of this year. Through December of last year, the number of jobs was actually still increasing on a month-to-month basis. But the number of jobs has been falling in each month of this year. And finally (3), full-time employment − i.e., more stable, higher paying jobs − in the United States is down by one-and-a-half million year over year.

No matter how one approaches the issue, the U.S. jobs picture is bleak. Only three major sub-sectors (as illustrated in the accompanying charts) are recording year-over-year percentage increases: education and health (+3.1%); leisure and hospitality (+0.6%); and government (+1.4%). Construction remains the most depressed sub-sector with a year-over-year record of -6.1% in job contraction.

Furthermore, the leisure and hospitality curve has plummeted from a high of +3.0% a year ago. To all appearances, it will soon be negative as well. The education and health category is comprised of essential services and has a record of staying strong even through significant downturns. Government employment also comes with a good deal of stability, but this will be tested going forward as federal, state and local administrations are forced to deal with funding shortfalls. Tax revenues are coming in short of expectations.

Across-the-board Economic Implications
The latest employment numbers are not a surprise, given the high level of initial jobless claims that reached 497,000 this past week. The nosedive in employment prospects has across-the-board economic implications. It is one more reason for individuals to be cautious in their spending commitments. It lowers consumer confidence. It will prolong the weakness in new housing markets. It reflects a business sector that is retrenching in light of the credit crunch.

It is interesting that the latest labor force report was released on the same day that Congress finally approved the financial bailout/rescue package. Hopefully this will be the kind of good news that will see freeing up of money for businesses to get back on track in their day-to-day operations. However, many investment decisions are likely to be suspended for some time until it is much clearer that the economy has been restored from ill health into well-being.

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