Friday, October 16, 2009

Unemployment Friday: 1 million lost job threshold reached

Don't get too excited about California's 0.1% decrease in unemployment. We are at 12.2% and we are forecasting the peak at 12.6% next winter spring. The pattern is going to be 0.2 up, 0.1 down over the next 6 months.

On the payroll side, September had a 39,300 drop in non-farm payrolls. Last months loss of less than 10,000 was a positive surprise and this month was a negative surprise. With this decline, we have now surpassed 1 million lost jobs for this recession. The peak was 15.202 million jobs in July 2007, and we are now at 14.200 million 26 months later. We are forecasting a bottom of 14.138 million this winter, so about 60,000 additional lost jobs over the next few months if we are correct.

As it is every month, the headline in this jobs report is the continuing depression in the Construction industry. The second headline is that this report gives us our first good read on cutbacks in public schools and local governments. After construction, this was the largest decline.

In the Valley, school systems have opened 2009 with about 1,000 fewer employees in each of San Joaquin, Stanislaus, and Fresno Counties. Sacramento metro area education jobs did not decline. I think this data is still a little noisy and there may be some revisions in the coming months.

This is the peak harvest month, and farm employment in the Valley continues to show virtually no change from a year ago, despite the water crisis. Without doubt, there are isolated areas of farm unemployment and reduced hours for some workers (due to both reduced planting and increased competition for jobs from unemployed construction and service workers).

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