Unemployment rates rose yet again in September to 9.8 percent, according to the U.S. Bureau of Labor and Statistics. But while companies continue to cut back on their workforces, research on U.S. unemployment rates and perceived lay-offs indicates that the losses are stabilizing.
The reported losses of 263,000 jobs last month represents an uptick of 0.1 percent compared to unemployment in August. Since the start of the recession in Dec 2007, the number of unemployed persons has grown to 15.1 million, with a loss of 7.2 million jobs.
"To me, whether it's 9.8 or 9.6 or 10.0 it's pretty much the same number," said Dr. Rajeev Dhawan, director of the Economic Forecasting Center and associate professor of Managerial Sciences at the J. Mack Robinson College of Business, Georgia State University. "I look at the job losses and that number was still pretty strong--more than a quarter million. That tells you that the economy is still not anywhere near recovery in that sense."
Cutbacks in multiple industries contributed to the unemployment rate increase in September, including construction, manufacturing and retail trade, yet these also showed signs of some stabilization as average monthly lay-offs decreased. Construction jobs dropped by 64,000, mainly due to lay-offs in the non-residential (down 39,000) and heavy construction (down 12,000) sectors. Average losses over the last three months have slowed to 53,000 from 161,000 between Oct 2008 and June 2009.
Manufacturing (down 51,000) also saw declines. Losses dropped by more than two-thirds (53,000) over the past three months from a 161,000 monthly average between Oct and June. Average monthly retail losses slowed from 68,000 jobs in the prior six-month period to average 29,000 jobs per month.
The lessening job loss averages indicate that the economy may finally be stabilizing, but full recovery could still be a long way off, according to a monthly layoff outlook report released Thursday by Challenger, Gray & Christmas. While the report found that layoff announcements fell in September for the fourth consecutive month to total 66,404, Rick Cobb, executive vice president of Challenger, Gray & Christmas, said the downward trend should not be confused with a real turnaround.
"We're sort of finding the bottom right now in terms of announced layoffs. What that means is that that unemployment number will begin to see some relief on unemployment, perhaps sometime in the next six to eight months."
Cobb continued, "We still have lots of pipeline in layoff that is impacting the unemployment number as it sits, so it's not unrealistic to think that the unemployment number will go above 10 percent and stay there."
Challenger estimates that the rate of announced lay-offs in 2009 is on par to supersede 2008 totals. Employers this year have already announced 1,136,908 job cuts, which is 49 percent higher than the 763,090 total from Jan to Sept 2008.
"At this point I would say we are out of emergency; we are stabilizing and that's about it," said Dhawan. "[The economy] is not ready to 'go home' or do anything that’s close to a recovery."