Unemployment drops to 5-year low, but job growth disappoints
WASHINGTON -- The nation’s unemployment rate dropped to a five-year low of 7.2% in September, the government reported Tuesday, but employers continued to show reluctance in hiring as they added a moderate 148,000 jobs over the month.
The Labor Department report, delayed 2 1/2 weeks because of the partial federal government shutdown, reflected an economy growing at a lackluster rate. The latest job gains matched the pace since the start of summer but came in below Wall Street’s forecast for an increase of about 175,000 jobs.
The disappointing growth is likely to reinforce the hesitance of Federal Reserve officials to begin a withdrawal of its monetary stimulus program. Fed policymakers are weighing a cutback in its $85-billion-a-month purchase of bonds, but officials have been waiting for stronger employment growth.
The economy added on average about 195,000 jobs a month in the first half of this year, but growth has slowed since then to about 143,000 a month, enough to keep up with population growth and new job entrants but much too slow to absorb at a satisfactory rate many of the 11.3 million officially unemployed or help the nearly 8 million part-time workers who want more hours.
The unemployment rate has been inching down this past summer, but that’s partly the result of workers dropping out of the labor force. The labor force did not shrink in September. The latest jobless figure is the lowest since November 2008 during the depths of the Great Recession,
Job growth in September was led by retail trade, transportation and warehousing, and temporary-help industries -- with each category adding more than 20,000 jobs. The construction sector added 20,000 jobs, its strongest gain since February. Manufacturing was flat, and the once-booming leisure sector, which includes hotels and restaurants, lost 13,000 jobs over the month.
Government payrolls rose by 22,000 in September, though federal employment shrank by 6,000.
The 16-day partial shutdown of government offices and facilities, which began Oct. 1, had no direct bearing on the September employment data, but surveys and anecdotal reports indicate that the uncertainty over the budget stalemate weighed on employers and possibly their hiring decisions last month.
The increase in temporary-help employment may signal a pickup in broader hiring to come. Another so-called leading indicator, the average hours worked in a week, showed no change in September at 34.5 hours. Average hourly earnings for all private employees rose a measly 3 cents from August, to $24.09 last month.
It will take some weeks if not months before analysts can fully assess the economic impact of the government shutdown, but most economists think the temporary closure of operations and furloughs of about 800,000 employees will shave half a percentage point off economic growth in the fourth quarter. That would most likely mean fourth-quarter growth of even less than the sluggish 2% average pace since the recovery began in mid-2009.
Some reading of the shutdown’s effect on employment can be made on Nov. 8, when the Labor Department’s jobs report for October will be released, one week later than had been scheduled.
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