The US economy surprisingly lost 95,000 non-farm jobs in September and unemployment remained stuck at 9.6%, as revealed by government data today, highlighting the stubborn recovery ahead of key mid-term elections.
The Labor Department report caught most analysts off guard who had predicted zero job losses and an uptick in the jobless rate to 9.7%.
The nonfarm payrolls reading marked a steep decline from a revised 57,000 job losses in August, 3,000 more than initially reported.
Government payrolls fell by a larger than expected 159,000, reflecting both a drop in the number of temporary jobs for the 2010 census and job losses in local government, the department data showed.
About 6,000 temporary census workers remain on the government payroll after the departure of 77,000 in September. Local governments shed 76,000 jobs.
Private-sector payroll employment increased by 64,000, well below expectations of a gain of 74,000 jobs. The department upwardly revised the August reading to 93,000 from an initially reported 67,000.
Economists were closely watching the private sector for signals the economy can grow under its own steam as the federal government winds down massive stimulus measures to support the recovery.
Average hourly earnings in September were flat and up only 1.7% in the past year.
The Department of Commerce provided data today that showed inventories at U.S. wholesalers climbed more than forecast in August as companies kept stockpiles in line with demand.
The 0.8% increase in the value of inventories followed a revised 1.5% gain in July that was more than initially estimated. Sales rose 0.5% following a 0.8% gain a month earlier.
The amount of goods on hand compared with sales implies that manufacturing will keep expanding, which should provide a lift for the economy. Even with inventories remaining stable and showing signs of rebuilding, recovery will probably still be hampered as consumers refrain for ramping up spending.
