Podcast: The September Employment Report and What It Means for the Economy
I’m Keri Fulton and I’m here with Chad Stone, the Center’s Chief Economist, to discuss the jobs report for September.
1. Chad, it seems like we’ve been getting pretty similar jobs reports in the past few months, with no significant improvements in job growth or unemployment. Was that the case again in September?
Yes, Keri, I’m sorry to say it was. The unemployment rate remained unchanged at 9.6 percent, private employers added 64,000 jobs to their payrolls but 77,000 people hired for this year’s Census went off the federal payroll. The phasing out of Census jobs was expected, but in addition local government payrolls fell by 76,000 jobs, 49,000 of them in education. It looks like the state and local government budget woes had a serious impact on teacher hiring at the start of the new school year.
2. I know the recession technically ended over a year ago in June 2009. Why is the labor market still so weak?
A recession is a period of declining economic activity and that decline has stopped. We have had four straight quarters of economic growth and the private sector has added jobs every month this year. The problem is, the economy is growing too slowly to generate the number of jobs we need to bring down the unemployment rate. We have a huge jobs deficit left over from the recession but the recovery is so sluggish that we are still in a protracted jobs slump.
3. How long will it take to get those jobs back?
It’s hard to tell at this point. The last time we had a sharp recession followed by a recovery where unemployment went down almost as fast as it went up was the 1980s. Both the 1990-91 recession and the 2001 recession were followed by protracted jobs slumps and that’s what seems to be happening now—but with a much larger jobs deficit to erase. If by some miracle we could conjure up a jobs recovery that followed the 1980s pattern starting tomorrow that would mean we would be creating an average of 500,000 jobs a month between now and January 2012 just to erase the jobs deficit from the recession and even longer to restore full employment, given growth in population since the start of the recession.
Nothing like that is on the horizon, so it’s going to take a long time to get the labor market back to where it needs to be.
4. What should we be doing for the unemployed in the meantime?
At a minimum, when Congress returns to work after the election, it needs to extend the emergency unemployment measures providing additional weeks of unemployment benefits to people who run out of their 26 weeks of regular benefits. Those measures are scheduled to expire in November. We’ve always had emergency unemployment measures in a recession and we’ve always ended them when the economy has regained its strength—we’ve never ended them when the unemployment rate is as high as it is now. Congress should also renew the TANF emergency fund—a program that has been highly cost-effective in providing jobs to the most vulnerable low-income citizens but which expired at the end of September.
Thanks for joining me, Chad.