Steve Blitz Morning Notes

Looking at the 64,000 private sector jobs created in September, after accounting for the usual 24,000 in health care, the rest were either in temporary business services or at restaurants (which is kind of temporary work as well). Thankfully people who are employed still like to eat out.

Against all this, local government employment contracts -- a sure sign of federal stimulus money falling away. There was also the announcement of a 300,000 jobs takeaway from the total because of benchmark revisions that go in effect in February. This essentially removes the net add from the BLS's broken birth/death adjustment

Here we are after nine consecutive months of growth in private sector jobs and the broad U-6 unemployment rate sits at 17.0% compared with 17.3% when the year began. Total private payrolls are just shy of 108 million -- the last time payrolls were this low, prior to the current recession, was March 1999. A decade of employment gains wiped out and at the current pace it will take another decade to get back to the pre-recession peak at 115.6 million. On the good news front, the tenure of long-term unemployment has been shrinking since May.

Unknown healthcare and tax costs are having a negative impact but not nearly as much as the lack of demand growth from any important sector of the economy. The policy plan now is to boost exports through a depreciated dollar with quantitative ease offsetting any rise in interest rates related to foreign debt holders wanting a higher yield to compensate for the loss on holding dollars.