U.S. Employers Add 57,000 Jobs in September

The U.S. economy created jobs in September for the first time in eight months, but the unemployment rate remained stuck at 6.1% and factories continued to shed workers nearly two years after the recession officially ended.

The Labor Department reported Friday that employers added a net 57,000 people to the nation’s payrolls last month. Temporary-help agencies took on 33,200 additional workers in what could be a sign of broader-based hiring to come. The government also revised August’s net job losses to 41,000 -- less than half the drop initially reported.

The figures were better than economists had anticipated. But the cheer was tempered by the absence of robust job creation in other sectors, an increase in long-term unemployment and the loss of 29,000 manufacturing jobs. It was the 38th consecutive monthly decline in factory employment.

“It shows that the job market is simply flat,” said Mark Zandi, chief economist at Economy.com, a research firm in West Chester, Pa. “It’s not expanding, but it’s not eroding. That’s an improvement but still not what we need to turn this into a sustainable recovery.”

Still, analysts, investors and government officials were heartened by the glimmer of good news on the job front, as well as by a separate purchasing managers survey showing that service industries expanded for the sixth month in a row, albeit at a slowing pace.

“Companies are beginning to believe that hiring is not a dumb thing to do, and that the recovery is here to stay,” said Brian Wesbury, chief economist at Griffin, Kubik, Stephens & Thompson, a Chicago investment bank.

President Bush cited the report as a signal that the sluggish job market was finally turning around. “Things are getting better,” he told small-business owners and employees in Milwaukee.

The nation has lost 2.6 million jobs since Bush took office in January 2001, with 1 million of the cuts occurring since the recession ended in November 2001. Recent polls indicate Americans are losing confidence in Bush’s handling of the economy, and some analysts predict the job market could be a determining factor in the 2004 presidential election.

Bush’s critics were quick to note that the economy had failed to generate the kind of job growth predicted by the White House when it secured passage of tax cuts that took effect in July. The president’s economic advisors said the cuts would create 5.5 million jobs by the end of 2004.

The September report suggested that the 22-month recovery has gained enough traction to offset the decline in manufacturing with job creation in other sectors, but not quite enough to bring down overall unemployment. The jobless rate has subsided from its post-recession peak of 6.4% in June, but analysts say the economy needed to generate at least 100,000 jobs a month for a sustained period to show a significant improvement.

A total of 9 million Americans were counted as unemployed in September. The jobless rate for African Americans rose to 11.2% from 10.9%; for Latinos, it declined to 7.5% from 7.8%.

One sour note was an increase, to 2.1 million, in the number of people who have gone without work for six months or longer. That is 23% of the total pool of unemployed. It was the highest rate of long-term joblessness in 20 years. The average duration of unemployment rose slightly to 19.7 weeks.

Last month’s manufacturing contraction extended a losing streak that has eliminated 2.8 million factory jobs since July 2000. But the rate of job destruction has slowed, from nearly 140,000 jobs a month in the eight-month recession of 2001 to about 58,000 a month since the recovery officially began.

The 33,200 jobs generated by temporary-help firms marked the fifth consecutive monthly increase.

Professional and technical service providers added a net 28,100 positions. Health-care employers added 14,800. The ranks of construction workers swelled by 14,000. Airlines, railroads and other transport firms added 11,900 people. And retailers created 10,000 jobs, as did financial firms.

Government employment shrank by 15,000 jobs, a reflection of the fiscal crises facing many states.

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Times staff writer Edwin Chen in Milwaukee contributed to this report.