Employers in U.S. Cut More Jobs Than Forecast in September

Job creation in the initial phase of 2010 remains exceptional weak in comparison to a similar stage of the previous cycle in 2004. Not only is total job creation sluggish but also dependence on the birth/death model (mathematical algorithm) to create those jobs has increased significantly. 1.5 million jobs were created from January to September in 2004. 44% of those jobs were assumed by the birth/death model. By comparison, 613 thousand jobs, about 60% less than 2004, have been created from January to September in 2010. Over 70% of 613 thousand jobs were assumed by the birth/death model. In other words, statistical techniques or ‘modeling’ have played a far greater role in job creation in 2010 than 2004. This is always a troubling sign.

Birth/Death Model (BDM) Contribution to Nonfarm Net Payrolls (NFP) Added/(Lost):

The U.S. lost more jobs than forecast in September, reflecting a decline in government payrolls that shows the damage being done by rising fiscal deficits.

Employers cut staffing by 95,000 workers after a revised 57,000 decrease in August, Labor Department figures in Washington showed today. The median estimate of economists surveyed by Bloomberg News called for a 5,000 drop. The unemployment rate unexpectedly held at 9.6 percent.

Source: finance.yahoo.com