Each new economic update is painful these days, and today’s release of the October employment report is no exception.
The U.S. economy lost 240,000 jobs last month, the Labor Department reports. That’s not as steep as September’s 284,000 tumble, but there’s no mistaking the trend. The economy is in recession and the labor market is now Exhibit A for that view, in no uncertain terms.
No wonder, then, that the jobless rate jumped to 6.5% in October, up from 6.1% in the previous month. The unemployment rate, as a result, is now at its highest since 1994.
Unfortunately, it looks like the negative momentum has a ways to go. Even the mighty services industry is now routinely stumbling. For the second month running, services employment dropped sharply, falling more than 9% last month, which comes after a 17% decline in September. The significance of this slump can’t be underestimated, given that services jobs represent about 85% of total nonfarm payrolls.
Weighing heavily on services is the retail business, which is now knee-deep in contraction. So-called same-store sales in the retail industry plunged 0.9% last month, reportedly the steepest monthly drop in almost 40 years.