US Outlook: You can actually see financial markets holding their breath in the minutes before the monthly US unemployment figures are released. Activity slows, as traders hover over their "buy" and "sell" buttons, ready to jump when the number comes out at 8.30am, New York time, on the first Friday of every month.
Yesterday's report provided us with a torrent of data, all of it speaking to the most critical economic question of our time: will the world's largest economy tip back into recession? Forget what you hear about businesses holding back on investment because of red tape, or political gridlock. The central unknown is consumer demand, and demand will not rise until consumers are more confident and better off. That won't happen until unemployment comes down.
And after the torrent? We are in the same place. The US is at risk of, but not in, recession. The employment picture is less gloomy than many thought, but too gloomy for anyone to be happy.
Here are the headlines. The US added 103,000 jobs in September. Government sector lay-offs offset but have not overwhelmed private sector payroll growth. Private sector jobs growth has averaged 105,000 per month since May, not enough to suggest recession, but not enough to make a dent in an unemployment rate that remained unchanged at 9.1 per cent. Economists think the US needs payroll growth in the region of 140,000 per month if the economy is to keep up with a rising population.
Financial markets duly sparked higher on September's slight improvement on the consensus estimates of 60,000 new jobs and a 9.2 per cent unemployment rate, but the pop didn't last.
Nor should it. In fact, markets really need not hold their breath on these figures, for a couple of reasons. For starters, the statistics are imperfect. The Labour Department is still trying to fix the number for July, which started out at 117,000 when it was reported two months ago, was then revised down to 85,000 and then yesterday was revised again, up to 127,000.
The other reason is that unemployment here is getting more intractable. The number of long-term unemployed (those jobless for 27 weeks and over) is now 6.2 million, accounting for 45 per cent of the jobless. The risk is that these people will form a rump who are not just unemployed but unemployable, after being out of the workforce for so long, and a permanent drag on economic activity – quite apart from the personal and social consequences. This is not a month-by-month problem.