US Employers Add 148K Jobs; Rate Falls To 7.2%
The U.S. economy added just 148,000 jobs in September, suggesting that employers held back on hiring before a 16-day partial government shutdown began Oct. 1.
Still, hiring last month was enough to lower the unemployment rate. The Labor Department said Tuesday that the rate fell to 7.2 percent from 7.3 percent in August. Unemployment remains historically high but is near a five-year low and is down from 7.9 percent at the start of 2013.
Tuesday’s release of the September jobs report had been delayed 2½ weeks by the shutdown, which likely further depressed economic growth and hiring. Temporary layoffs of federal workers and government contractors will probably lower October’s job gain.
Many economists say they won’t have a clear reading on hiring and unemployment until the November jobs report is issued in early December.
The economy has added an average of 143,000 jobs a month from July through September, weaker than the 182,000 added from April through June.
The department revised its estimates of job growth in July and August to show a net gain of 9,000 jobs. It said employers added 193,000 jobs in August, more than the 169,000 previously estimated. But it said just 89,000 were added in July, the fewest in more than a year and below the previously estimated 104,000.
“We continue to create just enough jobs to lower the unemployment rate,” Dan Greenhaus, chief global strategist for BTIG, an institutional brokerage.
Stock futures rose after the report was released at 8:30 a.m. Eastern time. The weaker job figures make it more likely that the Federal Reserve will maintain its level of bond purchases for the rest of this year. The bond purchases are intended to lower long-term interest rates and boost borrowing and spending.
High unemployment has discouraged many Americans from looking for work. The percentage of Americans working or looking for work remained at a 35-year low in September.
There were some positive aspects in the September jobs report. Several higher-paying industries added jobs at a healthy pace. Construction firms gained 20,000 positions. Government boosted payrolls by 22,000. Transportation and warehousing gained 23,400 jobs.
And average hourly pay ticked up 3 cents to $24.09. In the past year, hourly pay has increased 2.1 percent, ahead of the 1.5 percent inflation rate.
The deceleration in job growth was a key reason the Fed decided in September to hold off on slowing its $85-billion-a-month in bond purchases. Many economists think the lack of clean data will lead the Fed to put off any decision on the bond purchases until 2014.
Many economists say the shutdown cut $25 billion out of the economy and slowed growth to about a 2 percent annual rate in the October-December quarter. That’s down from estimates before the shutdown that the economy would expand at a 2.5 percent annual rate.
But growth will likely be a bit higher in the first three months of next year, as consumers and businesses make purchases and investments that were delayed during the shutdown.
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