Nonfarm payrolls dropped 95,000, the Labor Department said
on Friday. Private employment, a better gauge of labor market health, increased
64,000 after rising 93,000 in August.
A total of 77,000 temporary jobs for the decennial census
were terminated last month. Analysts polled by Reuters had expected overall
payrolls would be unchanged, with private-sector hiring gaining 75,000.
"This number makes QE2 more likely. The number just
confirms that we have a slow growth economy and there's a lot of work to be
done. But the silver lining is that the private sector was on the positive
side, though it wasn't strong enough," said Jay Suskind, senior vice
president at Duncan-Williams in Jersey City, New Jersey.
The government revised data for July and August to show
15,000 more jobs lost than previously reported. It also said its preliminary
benchmark revision estimate indicated employment in the 12 months to March had
been overstated by 366,000. The unemployment rate was unchanged at 9.6 percent
in August.
The Fed, which cut overnight interest rates to near zero in
December 2008, has already pumped $1.7 trillion into the economy by buying
mortgage-related and government bonds. The US central bank meets on Nov. 2-3.
"How it (quantitative easing) looks will be based on
how the data looks. Most are pricing in some $500 billion of easing, and I
don't think this really changes that," said Mark McCormick, a currency
strategist at Brown Brothers Harriman in New York.
The employment report is last before the Nov. 2 mid-term
elections in which President Barack Obama's Democratic Party is expected to
suffer large losses amid voter dissatisfaction with the economy.
Opinion polls suggest Republicans will take control of the
US House of Representatives, which may give them a platform to pursue their
agenda of restricting government spending to reduce a record budget deficit.
The recovery from the longest and deepest downturn since the
1930s has been slow to generate jobs.
Private hiring last month was held back by the
goods-producing industries, where payrolls contracted 22,000 as manufacturing
employment fell 6,000 after declining 28,000 in August. Construction payrolls
fell 21,000, reflecting the lasting troubles in the housing market, after
August's boost from the return of striking workers.
Private services sector employment rose 86,000 after
increasing 83,000 in August. Temporary help services — seen as a harbinger of
permanent hiring — increased 16,900 last month after rising 17,700 in August.
"Job growth in the goods producing industries has been
bottoming out. What we need to see, to get a really positive feed back loop in
the economy, is the services sector start to edge up," said Troy Davig,
senior US economist at Barclays Capital in New York.
The end of temporary census jobs and the loss of 76,000
local government jobs pushed total government payrolls down 159,000 last month.
The length of the average workweek was unchanged at 34.2
hours for a third straight month.
