Highlights
The private sector is doing its best to offset weakness in the government sector. But Census layoffs and state and local government cut backs have been more than offsetting. Payroll employment in September declined 95,000, following a revised 57,000 dip in August and a 66,000 decrease in July. The September fall was significantly more negative than the median forecast for an 8,000 decrease. The July and August revisions were net down a slight 15,000.

The Census Bureau layoffs of temporary workers continued to damp overall jobs. Government payrolls declined 159,000 after decreasing 150,000 in August. A drop in federal government employment was due to the loss of 77,000 temporary Census 2010 jobs. As of September, about 6,000 temporary decennial census workers remained on the federal government payroll, down from a peak of 564,000 in May. Employment in local government decreased by 76,000 in September with job losses in both education and non-education.

But on the positive side, private nonfarm employment continued to rise, advancing 64,000 in September, following a revised increase of 93,000 the prior month. The median market forecast was for an 85,000 boost for private payrolls.

Private service-providing jobs gained 86,000 after an 83,000 increase in August. The rise was led by a 38,000 boost in leisure & hospitality jobs. Other increases were scattered by category. Temp help services advanced another 17,000 after gaining 18,000 in August. This category typically is a leading indicator for permanent job hires or layoffs but companies are still more skittish than usual about adding permanent positions.

Goods-producing jobs fell 22,000 after a 10,000 increase in August. Manufacturing slipped 6,000 while construction jobs dropped 21,000. Mining rose 6,000.

Average hourly earnings were unchanged in September after rising 0.3 percent in August. The September figure fell short of the market estimate for a 0.1 percent gain. The average workweek for all workers was steady at 34.2 hours in September, matching expectations.

On a year-ago basis, overall payroll jobs improved up to 0.3 percent in September from up 0.2 percent the month before.

Turning to the household survey, the unemployment rate was unchanged at 9.6 percent, coming in a little lower than the market forecast was for a 9.7 percent.

Overall, business demand for labor is sluggish. Discounting the loss of temporary Census workers, the recovery continues but at a soft pace.

On the news, Treasury yields and equity futures were little changed. The dollar declined.

Market Consensus before announcement
NOTE: Consensus payroll numbers have been updated to include reaction to Wednesday's ADP report and Thursday's jobless claims.

Nonfarm payroll employment in August slipped 54,000 after falling a revised 54,000 in July. A big part of the weakness was seen in the government sector, which still included layoffs of temporary Census workers. Government jobs dropped 121,000 after falling 161,000 in July. For the August drop, 114,000 were due to layoffs of temporary Census workers. In contrast, private nonfarm employment continued to rise, gaining 67,000 in August, following a revised boost of 107,000 the month before. Average hourly earnings improved to 0.3 percent from up 0.2 percent in July. The average workweek for all workers was unchanged at 34.2 hours in July. The market forecast was for 34.2 hours. Turning to the household survey, the unemployment rate came in at 9.6 percent, compared to 9.5 percent in July. Looking ahead, recent initial jobless claims have been slowly trending down, suggesting that private payroll jobs might hold to a modest gain. However, the unemployment rate is still at risk of re-entrants to the labor force outweighing employment gains, boosting the unemployment rate.

2010 Release Schedule

Released On: 1/8 2/5 3/5 4/2 5/7 6/4 7/2 8/6 9/3 10/8 11/5 12/3 Release For: Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov