Economy loses 95K jobs due to government layoffs

[October 08, 2010]  WASHINGTON (AP) -- A wave of government layoffs in September outpaced weak hiring in the private sector, pushing down the nation's payrolls by a net total of 95,000 jobs.

The Labor Department said Friday that the unemployment rate held at 9.6 percent last month. The jobless rate has now topped 9.5 percent for 14 straight months, the longest stretch since the 1930s.

The private sector added 64,000 jobs, the weakest showing since June.

Local governments cut 76,000 jobs last month, most of them in education. That's the largest cut by local governments in 28 years. And, 77,000 temporary census jobs ended in September.

Nearly 14.8 million people were unemployed last month. That's almost 100,000 fewer than in August.

The report is the final one before the November elections, which means members of Congress will face voters next month with a jobless rate near double digits.

The weak job market also makes it more likely that the Federal Reserve will take additional steps to boost the economy. Most economists expect the Fed to decide at its meeting next month to buy government debt in an effort to lower interest rates and spur more borrowing.

Employers, faced with slow sales and a weak economy, see little reason to add to their workforces. The economy expanded at a feeble 1.7 percent annual rate in the April-June quarter. Most analysts think the economy will fare little better for the rest of this year.

Since the recession ended in June 2009, the economy has grown 3 percent, according to economists at Deutsche Bank. That's less than half the average 6.5 percent pace in postwar recoveries.

[Associated Press; By CHRISTOPHER S. RUGABER]

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