September Unemployment Report Shows Economy At The Crossroads Prior To Sept. 11.

The September unemployment report confirms the direction of the nation’s economy was uncertain at best before the events of Sept. 11. As a result of the terrorist attacks, a short recession is likely, according to the Employment Policy Foundation. The U.S. unemployment rate remained unchanged at 4.9 percent, but the Bureau of Labor Statistics’ (BLS) payroll survey shows jobs decreased by 199,000 last month.

“The unemployment data for September was collected too early to reflect the impact of Sept. 11,” EPF President Ed Potter said. “Recent events undoubtedly will lead the economy into a short period of contraction and readjustment. I expect, however, that current efforts to stimulate the economy through monetary and fiscal policy will help the nation rebound quickly from any recession that does develop.”

Total unemployment in September remained unchanged at around 7 million workers. After recording increases from January to July, the payroll employment survey data shows a total decline of 283,000 jobs since July. Compared to September 2000, however, payroll employment is 120,000 higher.

Payroll employment losses were concentrated in the manufacturing sector, which lost 93,000 jobs in September, Potter said. Overall, the sector has lost 1.1 million jobs since July 2000. With 17.5 million workers, the manufacturing sector accounts for just 13.2 percent of the workforce, the lowest share for this area on record. The banking and real estate sector recorded the only gain in the payroll employment survey with an increase of 14,000 jobs.

In contrast to the payroll survey data, the BLS household survey showed a gain of 788,000 last month. “The wide difference between the two surveys signals that the direction of the economy was not totally clear before the Sept. 11 tragedy,” Potter said.

The labor market continues to place a premium on education and skills, Potter said. Jobs for college graduates over age 25 increased by 130,000 in September. For workers with some college education, jobs increased by 289,000. That compares to a 168,000 decline in jobs for workers with a high school education or less.

“The unemployment rate for people with college degrees is 2.4 percent or just half the rate for the overall workforce,” Potter said.

The median duration of unemployment for workers in September increased slightly to 7.2 weeks from 6.9 in August. However, the numbers of workers who have been unemployment for more than six months actually declined by nearly 10 percent to 787,000 workers.

For more information at http://www.epf.org.