U.S. Sheds 95,000 Jobs

Unemployment remains at 9.6%

The U.S. economy unexpectedly shed 95,000 non-farm jobs in September and unemployment remained stuck at 9.6%, government data showed on Oct. 8.

The Labor Department report surprised most analysts who had predicted zero job losses and an uptick in the jobless rate to 9.7%.

The nonfarm payrolls reading marked a sharp decline from a revised 57,000 job losses in August, 3,000 more than initially reported. Government payrolls fell by a larger than expected 159,000, reflecting both a drop in the number of temporary jobs for the 2010 census and job losses in local government, the department data showed.

Private-sector payroll employment rose by 64,000, below expectations of a gain of 74,000 jobs. The department upwardly revised the August reading to 93,000 from an initially reported 67,000.

With nearly one in 10 workers out of a job, persistent high unemployment is a major stumbling block in getting the consumer-led economy firmly on the path of sustainable growth."The total number was a job loss, but if we strip out government, for now we are looking at private-sector payroll growth, which is positive," Dan Greenhaus, chief economic strategist at Miller Tabak, told AFP.

"The report is not meaningfully different from expectations so it shouldn't have too much of an impact on the broader discussion of the Federal Reserve and government spending."

The Fed suggested last month it was ready to resume asset purchases to help support the faltering recovery if needed.

The September unemployment reading marked the 17th consecutive month the jobless rate has equaled or surpassed 9.4%, the longest stretch since the start of monthly figures in 1948.

The recovery from recession in the world's largest economy has not been strong enough to generate normal labor force growth. More than eight million jobs have been lost since the start of the recession in December 2007. The economy emerged from recession more than a year ago, but the recovery has been slow and sluggish.

Gross domestic product expanded at a tepid 1.7% pace in the second quarter, a sharp decline from the first quarter, when real output increased 3.7%.

Economists estimate that at least 100,000 jobs need to be created each month to put the labor market on firm footing.

Copyright Agence France-Presse, 2010

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