As Unemployment Hits 6.5%, Those Expecting 7% Now Bracing for 8%

If you were looking for great news on the jobs report this morning, you probably believed the guy telling that "NOT JOKE" in the Borat movie.    Unemployment came in at a monstrous 6.5% rather than the 6.1% given for September.  This was the worst unemployment rate since 1994.

The non-farm payrolls came in at a whopping drop at -240,000. Estimates were for a drop of -200,000 or so, but the numbers being passed around yesterday on instant messengers from Wall Street professionals were more like -250,000.  Some were even bracing for a drop of -275,000 and worse. September was revised sharply lower to show a job loss of 284,000.

We have now lost 1.2 million jobs this year, and the NBER has not yet managed to get around to declaring an official recession.  Here are the by-sector numbers we saw:

• manufacturing -90,000
• construction -49,000
• business and professional -45,000
• financial-sector -24,000
• retail -38,000
• leisure and hospitality -16,000 jobs.
• temporary employment -50,000

These numbers would have again been much worse if you took out the government and health care workers from the equation.  Uncle Sam and local governments added 23,000 jobs and health care workers grew by another 26,000 jobs. 

With all of the layoff announcements, you know what this means.  The beatings will continue.

Jon C. Ogg
November 7, 2008