Economy Loses 159,000 Jobs in September

The U.S. Labor Department Friday delivered the grim employment news expected by most economists by reporting a drop of 159,000 in non-farm payrolls for the month of September. It was the largest monthly job loss reported by Labor in more than five years.

Economists had expected a drop in jobs of about 110,000 for the month.

The U.S. economy has lost jobs in every month of 2008, with total job losses standing at 760,000 at the end of September.

The Labor Department held the unemployment rate steady at 6.1 percent, as expected.

But the agency conceded that more job seekers were becoming discouraged and not seeking employment. Labor said that 1.6 million people were “marginally attached” to the total labor force. These individuals are workers that wanted and were available for work, and who had searched for work in the past 12 months, but had not searched for work in the 4 weeks preceding the survey. These people are not included in the unemployment rate.

According to MarketWatch, if marginally attached workers are included in the unemployment rate, it rose to 11 percent in September from 10.7 percent in August.

Manufacturing employment fell by 51,000 in September, bringing the decline in factory jobs to 442,000 over the past 12 months. Labor also said that Construction lost 35,000 jobs over the month. Thus far this year, all of the components of construction have experienced employment declines; the majority of the losses have been in the residential components.

Retail (-40,000 jobs), professional and business services (-27,000), and financial services (-17,000) were also sectors that saw significant declines.

Sectors that saw job growth were health care (17,000 jobs), mining (8,000) and government (9,000).