U.S. employers add 148K jobs; rate falls to 7.2%
Tue, 2013-10-22 14:39
WASHINGTON (AP) — 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 was strong enough to lower the unemployment rate. The Labor Department said today that the rate fell to 7.2 percent, down from 7.3 percent in August and nearly a five-year low.
The economy has added an average of 143,000 jobs a month from July through September, down from 182,000 from April through June.
Revisions to the previous two months were mixed. Employers added 193,000 jobs in August, better than the initial estimate of 169,000. But they added just 89,000 in July, the fewest in more than a year and below the previously reported 104,000.
Stock futures rose after the report was released. The weaker job figures make it more likely that the Federal Reserve will maintain its level of bond purchases when it meets next month. The bond purchases are intended to lower long-term interest rates and boost borrowing and spending.
The jobs report was delayed 2 ½ weeks because of the shutdown, which may have further depressed economic growth and hiring. Temporary layoffs of federal workers and private government contractors will probably lower October’s job gains. But that’s likely a temporary decline.
Many economists say they won’t have a clear read on hiring and unemployment until the November jobs report is released, in early December.
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 latest 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 three 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. The lack of clean data could lead the Fed to push 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.