Work Force Loses 159,000 Jobs In September
RENEE MONTAGNE, host:
Employment plunged last month, as the economy lost nearly 160,000 jobs. It's the ninth straight month of job losses. NPR's labor correspondent Frank Langfitt is here with us in the studio to talk about this. And Frank, the numbers are higher than some experts had predicted - by quite a lot. What industry saw the biggest losses?
FRANK LANGFITT: Well, you know, about half of these losses came in construction and manufacturing. And construction, of course, that's related to this long housing slump that we've had. And manufacturing, one of the big chunks there is motor vehicles. Part of that, I think, is gas prices. A lot of it, though, is an economic model in Detroit that's no longer working. You have very high health-care costs, and they've been slashing jobs now for a very long time.
MONTAGNE: Now, are these elements different from previous months?
LANGFITT: Well, you know, I would say in a sense it's the same, only a lot worse and frankly, more alarming. What we've been - I've been reading the reports pretty much every month for a long time. And as things began in construction, and then they sort of filtered, starting with the real-estate problem, then they filtered into mortgage banking. And now what you're seeing that's really concerning is it's spreading to completely unrelated sectors of the job market. To give you an example, retail trade was down 40,000. That has nothing to do with real estate, but consumers are more concerned. They're holding on to their money. They're not spending as much. And the retail trade, department stores, they're seeing that. Leisure/hospitality, hotels and restaurants, they're down about 17,000, and it's a similar kind of phenomenon in which people are really very - they're very anxious about the economy, and they're not willing to spend as much and go out as much.
MONTAGNE: And looking ahead, what are the concerns, then?
LANGFITT: Well, there are a couple of things. I think that what we - I don't think what we saw in this report yet - it's way too early - is to see what happens to the financial industry. We've seen all these consolidations of banks. Certainly, some of the banking companies that have taken over some of these other banks, they're going to keep maybe many of their employees, but we're going to probably see thousands of layoffs, and that could hit hard in the economies of places like Charlotte and, of course, Manhattan. So, I think we'll be watching to see what the economic impact of losing those paychecks is on those cities. The other, frankly, is the credit crunch. We don't know what the impact of that is going to be on the job market yet. And I think that that's one of the things people will be looking at very closely. I was speaking to David Weiss. He's the chief economist at Standard & Poor's, and here's what he said.
Dr. DAVID WEISS (Chief Economist, Standard & Poor's): The credit markets will determine how long the recession lasts and how deep it goes. If they remain frozen like they are now, it's hard to see how we can get out of this anytime soon.
LANGFITT: And you know, the thing that Weiss said there that we should focus on is, he said the recession. When I now have conversations with economists these days, it's almost assumed that we're in a recession, even if we had some better gross domestic product growth in spring. When people look at these numbers every month of fall, they really do believe that we're in a recession. And in terms of the credit crunch, you know, one of the problems there is if businesses can't borrow, it's very hard for them to expand, and of course, they can't hire. So, we're also - we may begin to see, if the credit crunch continues, people hiring less and less.
MONTAGNE: Frank, thanks.
LANGFITT: You're welcome.
MONTAGNE: NPR's Frank Langfitt.