Job Growth Was Tepid Before the October Crazinessby
The U.S. economy added slightly fewer jobs than expected in September, meaning it headed into a horrific October without much momentum to withstand the partial government shutdown and the national brush with default.
The U.S. Bureau of Labor Statistics said today that payrolls rose by 148,000, which was less than the 180,000 median prediction of economists surveyed by Bloomberg. The number was “disappointing,” Capital Economics’ chief U.S. economist, Paul Ashworth, told clients in a note.
The reported unemployment rate fell by a tenth of a percentage point, to 7.2 percent, the lowest level since the recession month of November 2008, as job growth exceeded the increase in the labor force. (The unrounded decline was only from 7.28 percent to 7.24 percent.)
The jobs report usually comes out the first Friday of each month but was delayed by the partial shutdown of federal government operations.
The participation rate—that is, the share of adults who are either working or looking for work—stayed at 63.2 percent, which matched the lowest level since August 1978. The participation rate rose for decades as women flooded into the workforce, but it fell sharply in the 2007-2009 recession and has continued to drift lower.
Economists still don’t know how much harm was done to the economy in October by the twin assaults of the shutdown and the brinkmanship over the debt ceiling. Federal Reserve policymakers will probably maintain stimulus at its current level for several months, just in case the October events put a serious crimp in growth, Stephen Stanley, chief economist at Pierpont Securities, said in an Oct. 21 research note, according to Bloomberg.
Other key figures in the report:
• Private payrolls rose 126,000, while government payrolls increased 22,000.
• Construction employment rose by 20,000, the most since February. Retailers added 21,000 jobs.
• Temporary employment, which can be a precursor to permanent job gains, rose a healthy 20,000.
• Average hourly earnings rose by a modest 0.1 percent to $24.09 from August, and by 2.1 percent from September 2012.
• The average workweek held at 34.5 hours.