U.S. Employment Report Gets Even Weaker

Last month, I compared strong and weak parts of the U.S. employment report. Most of the components I analyzed are even weaker than last month, except the household survey employment number that fell "merely" 222K, as compared to 342K the previous month, and also the headline unemployment rate that was unchanged instead of rising 0.4%:points as in August. But as employment as previously stated continued to decline significantly this reflects falling participation rate, as unsuccessful job applicants are discouraged by the constant rejections from even bothering applying. The cumulative 12 month job loss rose above 1 million with this.

Meanwhile, the payroll survey numbers are all much worse, with 159K in job losses there despite the dubious imposition from the so-called "birth-death"-model, with a 0.5% drop in aggregate hours worked and a mere 0.2% increase in average hourly earnings (which combined would suggest a 0.3% decline in aggregate earnings). The decline in hours worked continued to be large in manufacturing suggesting another significant decline in industrial production.

This again confirms my previously stated view that the economic contraction is accelerating in pace.