The USA economy added a disappointing 142,000 jobs in September and the unemployment rate stayed at 5.1 percent, the U.S. Department of Labor reported today.
Economists expected job growth to rebound last month, forecasting a gain of 203,000 net new positions. Adding to the negative tone, the government also revised lower August jobs to 136,000 from 173,000 and July to 223,000 from 245,000.
Last month the health-care sector added 34,000 jobs, professional and business services tacked on 31,000 and retail was up by 24,000, the report said.
Central bank policymakers decided they wanted to see a few more economic data before raising the rate to determine if the market turmoil and global slowdown was harming the US economy.
Mining continued its downward trend last month, losing 10,000 jobs, mostly in support activities (-7,000 jobs).
CNBC’s Squawk Box discussion of the disappointing report quickly turned to Federal Reserve policy and whether it vindicated the Fed’s decision not to raise rates, or just proved they missed their chance to do so.
The recent pace of job growth should have been enough to push the unemployment rate lower because only around 100,000 new jobs are needed a month to keep up with population growth. A lack of wage growth is a big reason why many Americans haven’t felt the benefits of US economy’s recovery.
There were other signs of persistent weaknesses that the Fed views as showing slack in the jobs market.
Forecasting the rate of growth in corporate payrolls has proven to be just as hard as trying to guess when the Fed will raise the shortest of short-term interest rates.
There was a good deal of bad news in the report.
Paul Ashworth, chief <strong>United Statesstrong> economist at Capital Economics, said that “aside from manufacturing, which is getting hammered by the stronger dollar, everything else [in the <strong>U.Sstrong>. economy] looked pretty positive” before the jobs report was released. We just don’t know how much we should or shouldn’t worry about this.
The unemployment rate, which is calculated from a different survey, was unchanged at 5.1% as a sharp drop in the number of Americans employed was offset by an even steeper decline in the number working or looking for jobs, the Labor Department said Friday. This number is erratic, but this is an unusually large one-month decline.
The gains tilted to lower-paying industries instead of higher- paying export-related fields, helping to explain why average hourly earnings fell 1 cent to $25.09.
In September, 1.9 million people were marginally attached to the labor force, down by 305,000 from a year earlier.
Labor adds lots of these phantom jobs in the spring – and less of them in the summer. The underlying economy is incredibly weak, even though interest rates have effectively been zero for the last 6 years. Wages have increased 2.2 percent from one year ago.