US Adds 148,000 Jobs in September, Unemployment Rates Inches Down to 7.2 Percent

Andrew Klips |

The United States added fewer jobs than expected in September, while the unemployment rate eked lower, according to the employment situation report from the Labor Department on Tuesday morning that also delivered some sharp revisions to the two prior months.  The report was originally scheduled to be released on October 4, but was delayed due to the partial government shutdown that lasted 16 days at the beginning of the month.

The report showed that the nation added 148,000 jobs during September, far below the 180,000 that economists predicted.  The unemployment rate edged down to 7.2 percent from 7.3 percent in August.  Economist forecast the unemployment rate to be unchanged.  Over the last year, employment growth averaged 185,000 per month.

The unemployment rate, which is down from 7.9 percent at the start of the year, is near a five-year low, but largely because people are not looking for work.  The civilian labor force participation rate, at 63.2 percent, was flat in September, remaining at the lowest level in 35 years.

July’s jobs figure was revised from a gain of 104,000 to a gain of only 89,000, marking the worst one-month gain since June 2012.  August’s figure was revised upward to reflect a gain of 193,000 jobs, versus the 169,000 originally reported.  On the plus side, the revisions added 9,000 more jobs across the two months that originally thought.

In September, jobs gains were seen in construction (+20,000), wholesale trade (+16,000), and transportation and warehousing (+23,000).  Employment in professional and business services continued to expand, adding 32,000 jobs during the month.

The other major industries barely moved the needle in creating jobs in September.

The average workweek for all employees on private nonfarm payrolls was unchanged in September at 34.5 hours.  Average hourly earnings for all employees on private nonfarm payrolls rose by 3 cents to $24.09.  In the last year, average hourly earnings have risen by 49 cents, or 2.1 percent.

Wall Street is still skeptical about getting a solid reading on labor trends from the figures that have been coming from reports on initial jobless claims and the employment situation because of external factors, such as the shutdown and budget wrangling in Washington.  Market watchers are trying to glean what they can from the info, though, as a barometer for what the Federal Reserve may do with its economic stimulus package.  Most expected the Fed to begin scaling-back it purchases of $85 billion each month in Treasuries and mortgage-backed securities in September, but the unrest in Washington put that on hold.  The majority of economists now think that the central bank won’t begin tapering until at least January.  The Federal Open Market Committee meets again on October 29 – 30.

The momentum built in the markets is not being slowed with today’s less-than-expected jobs figure.  The Dow is at one-month highs, adding 65 points, and the S&P 500 has printed new all-time intraday highs in advancing 7 points.  The Nasdaq is the laggard of the main indices, slipping 7 points lower in morning trading.

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