WASHINGTON (Reuters) - Local government cutbacks were the primary culprit behind the surprisingly large number of U.S. jobs lost in September.
Friday’s Labor Department report, showing a net decline of 95,000 jobs last month, was considerably weaker than what economists polled by Reuters had expected. The consensus forecast was for a virtually flat month.
Private hiring was only slightly below forecasts, and there were some bright spots in retail and restaurant hiring, which offer some optimism for consumer spending.
GOVERNMENT JOBS
* Overall, government payrolls dropped by 159,000 last month. About half of that reflected the well-flagged expiration of temporary jobs for the Census, and economists had factored that in to their forecasts.
* Local governments cut 76,000 jobs, a surprisingly steep cut that likely reflects budget strains at municipal level. Nearly 50,000 of those jobs were in education.
* Most states and municipalities, unlike the federal government, are required to balance budgets, so they must cut spending to close gaps.
* Job cuts at the state and local level are difficult to predict, and may roil monthly employment reports for the rest of the year and into 2011 as budget strains persist.
PRIVATE SECTOR
* In the private sector, services jobs showed a solid gain of 86,000, which helped to compensate for a dip in manufacturing jobs.
* Health care added 24,000 jobs, and has been a consistent source of growth in recent months.
* There were pockets of strength in leisure and hospitality, which suggests some modest improvement in consumers’ discretionary spending.
* Food and drink establishments gained nearly 34,000 jobs as consumers dine out more. Performing arts and spectator sports also showed growth.
Editing by Chizu Nomiyama
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