Sep. 4, 2009 – 8:00 a.m.

Main Street Still Awaiting Recovery

Payroll employment contracted by another 217,000 jobs in August – an "improvement" from the half-million monthly job loss rate we saw earlier in the year – but hardly good news for those still looking for a job. Moreover, revisions for the past two months were to the downside.

The improvement was driven by smaller negatives across the board. Government employment also declined as state job losses mounted, and a lot of pink slips were doled out to teachers. The only bright spot was health care, which showed increases.  

The unemployment rate jumped to 9.7% after falling slightly in July. We will easily hit 10% by the end of the year.

Bottom Line: The bloodletting in the labor markets is abating, but is not over. Moreover, it's hard to imagine employers hiring aggressively even as they get more optimistic, as credit markets are still relatively tight. We just don't have the ability to leverage our way out of this recession like we did in the past.

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