Last month, nearly 2 million Americans had been unemployed for 27 weeks or more, representing nearly 22 percent of all jobless workers. Those numbers were similar to July's.
Many economists and participants in financial markets had been encouraged by recent economic data, which showed that consumers had been spending at a rapid rate in the current quarter.
But a number of analysts said they were concerned by the income and hours-worked data in Friday's report. Average hourly earnings rose a miniscule 0.1 percent last month, and the average hourly workweek was unchanged at 33.6.
"The majority of economists are focusing on relentless spending data," said David Rosenberg, chief North American economist at Merrill Lynch. "Personal spending is strong, there is no doubt about it."
"But that is because of the mortgage refinancing boom and the tax cuts," he said. "Spending is strong, but production and incomes are weak. Once the steroids from home refinancing wave and the tax cuts wear off, the economy is likely to slow down."
Rosenberg estimated that on an annualized basis the economy received US$300 billion worth of stimulus from the tax cuts and the extra money left in homeowners' pockets by lower mortgage rates.
Rising productivity is very good news for corporate profits, which are rising. Capital spending is improving, and eventually that may lead to increased hiring.
Liro, who is forecasting growth of anywhere from 3 to 5 percent over the next five or six quarters, said he expected hiring to increase in the fourth quarter. But the structural changes Sullivan described are real, he said, and will limit the rise in employment.
"There will be some job growth in the fourth quarter," Liro said, "but it won't be booming."
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