“Labor has reported a healthy average of 212,000 job gains a month this year, but advances in August slowed moderately to 173,000 – a drop that many economists attributed to a tendency for initial payroll estimates in August to be undercounted because of seasonal adjustments related to the start of the school year“.
Employers added a mere 142,000 jobs in September, the Labor Department announced on Friday, suggesting that the USA economy is losing momentum after a second month of lackluster growth.
You may have seen that the unemployment rate stayed steady at 5.1%, and employers added about 150,000 workers to their payrolls.
Job growth in August also was revised down sharply to 136,000, the Labor Department said Friday.
The number of new jobs created in the United States has averaged 198,000 a month for 2014 – below last year’s average of 260,000. The BLS indicated that wages went down one cent per hour in September after an increase of eight cents in August. Many investors were skeptical whether the Fed could tighten before the end of the year, and today’s job data seems to have pushed a rate-hike out into 2016, based on information from The Wall Street Journal. After all, inflation is well below the Fed’s 2 percent target; core inflation, which strips out volatile food and energy prices to better predict future inflation, is too, and wages are barely rising themselves.
The alternative U-6 jobless rate (what a few people mistakenly call the “real” unemployment rate, but isn’t because it includes millions of people who are actually working) fell to 10% in September, the lowest since May 2008.
The weak report vindicates the Federal Reserve’s decision to delay an interest-rate increase last month.
Worse than expected jobs numbers will most likely put the brakes on the Federal Reserve’s plan to raise interest rates which have been languishing between zero and 0.25 percent since 2008.
Even so, many economists are still not seeing the accelerated growth that suggests the economy needs to slow – or that businesses are experiencing wage pressure.
As only 100,000 new jobs are needed each month to keep up with population growth the unemployment rate should have dropped in September.
Fed chairman Janet Yellen last week said the central bank would probably have to raise rates this year to stop the economy from overheating.
“Ugly, really ugly, it’s just hard to find anything good in the report”, JJ Kinahan, chief strategist at TD Ameritrade, told CBSNews.
Other recent economic data indicated job growth last month had returned to form.
The number of unemployed people also was little changed at 7.9 million. In September, employment rose in general merchandise stores by 10,000 and automobile dealers added 5,000 new employees.