Another depressing employment report

The Bureau of Labor Statistics released the report on employment and unemployment for September this morning. These are the key facts:

*The data come from the first half of September, so any contraction since the financial crisis really hit will show up next month.

*Payroll employment fell by 159,000. This is the 9th straight month of declining employment, and the decline in September is the largest decline in ths stretch. Total employment is now down by more than 500,000 since last September, and down nearly 700,000 since January.

*Employment in construction is down about 465,000 since last September (more than 6%). Employment in residential construction is down about 13% since last September.

*Manufacturing employment is down by about 340,000 (about 2.5%). Almost all of that (326,000) is in durable goods employment

*Health care continues to be a bright spot, with employment rising by about 365,000 (nearly 3%).

*The unemployment rate is unchanged from August, but up 1.4 percentage points from September 2007.

*Even the unchanged unemployment rate masks continued weakness, however. Employment, measured using the household survey, fell slightly from August and is about 1 million below September 2007. The employment-population ratio fell by o.1 percentage point, and is 0.9 specentage points below September 2007.

Let me reiterate that the second half of the month was much weaker than the beginning of the month. I think we can expect, if anything, a larger employment decline in the October report, and almost certainly a rising unemployment rate.