U.S. Sept non-farm payrolls fall, jobless rate up

WASHINGTON (Reuters) – U.S. employers cut a deeper-than-expected 263,000 jobs in September, lifting the unemployment rate to 9.8 percent, according to a government report on Friday that fueled fears the weak labor market could undermine recovery from a prolonged recession.

The Labor Department said the unemployment rate was the highest since June 1983 and payrolls had now dropped for 21 consecutive months.

Analysts polled by Reuters had expected non-farm payrolls to drop 180,000 in September and the unemployment rate to rise to 9.8 percent from 9.7 percent the prior month. The poll was conducted before reports, including regional manufacturing surveys, showed some deterioration in employment measures.

However, analysts said the bigger-than-forecast fall in payrolls was not the start of a reversal in the trend toward a moderation in the pace of job losses and some even suggested September's reading might have been distorted by a sharp drop in government employment.

"The worst of the labor market deterioration is over. Despite this month's bigger decline, the trajectory of job losses is still positive as the trend rate has slowed as economic activity has begun to recover," said Steven Wood, chief economist at Insight Economics in Danville, California.

Stock futures dropped sharply on the news. Shares had already slipped this week as other data pointed to a leveling-off in the nascent U.S. recovery from a recession which began in December 2007.

U.S. Treasury prices rallied initially but then gave up those gains. Bond market investors are wary after a recent rally in U.S. government debt -- considered a safe investment in times of weak economic growth -- that has brought the benchmark 10-year note to its lowest yield since May. Bond prices move inversely to yields.

U.S. employers cut a deeper-than-expected 263,000 jobs in September, lifting the unemployment rate to 9.8 percent, according to a government report on Friday that fueled fears the weak labor market could undermine economic recovery. REUTERS/Graphics

The worst of the labor market deterioration is over. Despite this month's bigger decline, the trajectory of job losses is still positive as the trend rate has slowed as economic activity has begun to recover," said Steven Wood, chief economist at Insight Economics in Danville, California. Now I know why Cali is in an economic mess. Luminaries like Danville.

2 posted on 10/02/2009 8:59:39 AM PDT by ABQHispConservative (A Blue Dog Democrat is an oxyMoron!)

I mean Wood, not Danville.

3 posted on 10/02/2009 9:00:02 AM PDT by ABQHispConservative (A Blue Dog Democrat is an oxyMoron!)

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