September's unemployment data is out today, and it's no good. The private sector gained 64,000 jobs, about the same as August, but that growth was off-set by a drop of 159,000 government jobs, mainly census workers and laid-offs in local government. Unemployment remained steady at 9.6 percent, but worryingly, the best measure, graphed above, of people affected by a bad labor market -- the unemployed, discouraged workers, and those who have lost hours because of the economy -- nudged up to 17.1 percent of the labor market.
This month's job numbers do demonstrate quite aptly the inability of Democrats to enact their preferred Keynesian policies; while private jobs have been expanding at a steady clip, they have not been growing fast enough to support the public's demand for work. The government is supposed to lead the way in this kind of soft labor market by creating jobs, not shedding them. That's why Democrats wanted more aid to states: to prevent the kind of layoffs, especially of teachers, that drove the losses this month.
The good news is that when the Fed meets in November, this is the sort of indicator that makes a strong case for more aggressive monetary policy to bolster the economy. The news, however, isn't good for the Democrats, who were hoping for some sign of improvement to reinforce their election argument for another important public meeting in early November; unfortunately, the status quo is what they receive.
-- Tim Fernholz
