Job Creation Posts Jump, But Rate Still Steady at 9.1%
The U.S. jobs picture beat tepid expectations, with the economy creating a significantly better than expected 103,000 new jobs in September that nonetheless was not enough to cut the unemployment rate from 9.1 percent.
Economists had been looking for 60,000 total new nonfarm jobs, a month after the shock that the U.S. had created a net of zero new jobs.
That August number, though, was revised upward in the latest report, to show the economy creating 57,000 jobs for the month.
"Today’s data show the persistence of merely moderate employment gains," Citigroup economist Steven Wieting said in a note. "Employment can be a poor guide to more than the immediate future, but the data confirm our view that early August economic reports exaggerated U.S. weakness.
Getting the jobs market rolling again is seen as one of the two central spokes — the other being housing — in preventing the US economy from entering another recession.
Friday's numbers offered mild consolation to those hoping that the US can at least plod along if not move into expansion mode.
Striking Verizon workers back on the job fed much of the gains as 45,000 of the telecom giant's employees came off the picket lines and the unemployment rolls.
Average hourly earnings in September rose slightly to $23.12.
"In the big picture, today’s reading soothes recessionary fears," said Andrew Wilkinson, chief economic strategist at Miller Tabak in New York.
The enthusiasm, albeit muted, was not universally shared.
"The September performance is more of a dead cat bounce than real progress," Peter Morici, economist at the University of Maryland, said in a snap analysis. "Jobs creation will remain inadequate to keep unemployment from falling in the months ahead, especially considering the mass layoffs recently announced in banking and pharmaceuticals that will be effected in the months ahead."
Long-term unemployment remains a problem, as the average duration of joblessness ticked up to a new record of 40.5 weeks. The number of those out of work for more than 20 weeks rose 208,000 to 6.24 million.
The manufacturing sector shed 13,000 jobs, posting a drop for the second month in a row. But the household survey, which is a more methodical count that doesn't utilize estimations in the way the larger survey does, showed a net job creation of 137,000.
The level of unemployed people remained unchanged, though, at 14 million.
The more encompassing unemployment rate, which includes those out of work but not actively looking for employment, jumped to 16.5 percent.
As governments continue to grapple with deficit problems, public sector cuts are weighing on the jobs picture.
For September, the total government job loss came in at 34,000, which is actually below average for recent months.
Still, the report remained consistent with an economy that is treading water and unlikely to be able to lower the unemployment report substantially.
"Employers are not going to step up hiring unless demand picks up. But consumers are not going to spend more until employment strengthens," said Kathy Bostjancic, director of macroeconomic analysis for The Conference Board. There is no help on the way from monetary or fiscal policy, at the federal, state, or local level. "This all adds up to a labor market that will continue to struggle to deliver even modest gains this autumn or winter."
The average work week edged higher to 34.3 hours while average hourly earnings increased by 0.2 percent over the past month, which brings annualized growth to 1.9 percent, which is just below the rate of inflation.