263,000 Jobs Lost in September, Far More Than Forecast

By JACK HEALY

October 2, 2009 New York Times

The American economy lost 263,000 jobs in September — far more than expected — and the unemployment rate rose 9.8 percent, the government reported on Friday, dimming the prospect of any meaningful job growth by the end of the year.

The Labor Department’s monthly snapshot of unemployment dashed hopes that the pace of job losses would continue to slow as the economy clawed its way back from a deep recession. Economists had been hoping for 175,000 monthly job losses.

In one bright spot, fewer jobs were lost in August than originally reported — with 201,000 positions gone instead of earlier figures of 216,000.

But overall, the report offered little good news for the 15.1 million unemployed people in the United States. The number of hours worked stagnated. Overtime hours slipped in many industries. And temporary help companies — typically, among the first to rebound after a recession — shed 1,700 jobs.

Indeed, while many businesses are making money again and seeing new orders trickle in, most are not ready to hire back the workers they laid off, even part-time.

To economists, that suggests that unemployment could remain at historically high levels through next year, if not longer.

“It’s a little bleak,” said Marissa Di Natale, senior economist at Moody’s Economy.com. “We’re not going to see job growth until the second half of next year. And even when it does start to grow, it’s going to be slow.”

The economy has been bleeding jobs every month, without interruption, for nearly two years. More than 15 million people in the United States are now unemployed, and more are working part-time jobs for less pay, or have given up looking for work altogether.

“This is still severe,” said Andrew Stettner, deputy director of the National Employment Law Project. “It’s not going to be turning around as fast as people want.”

At the same time, other measures of the economy are beginning to waver, signaling that the initial phase of the recovery — a sharp rebound from a deep bottom — may be giving way to a long grind higher, marked by uncertainty and pain for many.

For Democrats, a slow recovery — and an unemployment rate at a 26-year high — could quickly become a liability ,if businesses are not hiring by next year’s mid-term elections.

The Obama administration has said job losses would be even worse without the tax credits and spending projects from the $787 billion stimulus, but Republicans have pilloried the programs as ineffective.

In Elizabeth, N.J., Stephanie Wheeler has been watching her savings and unemployment benefits run out. A year after she lost her job at a data processing company, she has $800 left in her savings account and six more weeks of $379 unemployment checks. After that, she said she does not know what to do.

“It’s terrifying,” Ms. Wheeler, 56, said. “I have an apartment. I’ve been here for eight years. I don’t know what’s going to happen. I’m petrified of being set out on the street.”

She said she has been applying for work as an administrative assistant, receptionist and in customer service, and resorted to paying an online agency $206 to update her résumé, after she said she was guaranteed a job or her money back. So far, she has gotten neither. She said she has been paring back her expenses as best she can, starting with meals.

“I try to eat less,” she said.

Some 52 percent of unemployed people have exhausted state jobless benefits, and some are reaching the end of the makeshift strands of emergency extensions. The House of Representatives has passed a bill that would provide another 13 weeks of benefits, but a similar bill has stalled in the Senate over questions of whether it should only cover people in the hardest-hit states.

On Thursday, Ben S. Bernanke, the Federal Reserve chairman, nodded at the problems that long-term unemployment creates for workers, saying that they risk losing skills and becoming less employable if they detach from the labor force.

As a construction worker, Richard Hall, 44, of Winter Springs, Fla., spent two decades pouring concrete, framing buildings and helping to erect glittering high-rises, but it has been a year since the company he worked for him shut down. He said he has found no other building jobs in Florida, and his final unemployment check, for $235, arrived on Wednesday. Now, he said, he and a friend drive around in a pickup truck and pick up old washing machines, ovens and loose metal from the street and sell it for scrap.

“They pay you by however many pounds,” he said. “It’s better than sitting around doing nothing. That gets old real quick.”

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