September unemployment numbers: Some good (but not great) news

We just got the jobs data for September: payrolls were up 103,000 and unemployment held steady at 9.1%. The increase in payrolls includes 45,000 Verizon workers who were striking in August and back at work in September.

We’re basically stuck in a holding pattern, but at a very high level of excess capacity. There’s enough growth for now to squeeze out some jobs, but not enough to nudge the jobless rate down. In fact, since April it has hovered between 9 and 9.2 percent, and last month, about 45% of the jobless had been unemployed for at least six months (my CBPP colleague Chad Stone will post details later, with a focus of the long-term unemployed).

With upward revisions to payrolls of the prior two months and the return of the striking workers, we can get a clearer picture of job growth by averaging over the quarter. Average monthly job growth over the third quarter was 96,000 compared to 166,000 a year ago. That’s a pretty sharp deceleration, but it’s what you’d expect given persistent weak demand and the fading of fiscal support.

While stable unemployment is better than rising unemployment, the stability is fragile. Economic headwinds are swirling around out there, and unless there’s decisive action at home on the fiscal front (i.e., enacting the jobs plan) and in Europe on the banking front (i.e., recapitalization and debt restructuring), we will soon depart from stability and things will get worse.

More to come…