U.S. Department of Labor Reports Unemployment Rate Drops to 7.2 Percent
Nearly 150,000 jobs were added to the U.S. economy in September, indicating a scale back in hiring during the lead up to the recently-ended government shutdown. But the rate was still high enough to see the unemployment rate nudged down from 7.3 percent in August to 7.2 percent. The U.S. Labor Department was forced to delay the release of the September jobs report by over two weeks due to the shutdown, likely further slowing hiring and economic growth.
Job gains for October will also likely suffer from the temporary layoff of federal employees and government contractors, so the November report may be the first clear view of the economy in months. The report “reinforces the impression that the labor market was losing a little momentum heading in to the shutdown,” said Josh Feinman, global chief economist at Deutsche Asset and Wealth Management. “The labor market is continuing to create jobs. …It’s just frustratingly slow.”
During Q3 of 2013, the economy added an average of 143,000 jobs per month compared to the average 182,000 jobs during Q2. The hyper-competitive job market has discouraged many workers from seeking jobs and the number of Americans working or actively seeking work continued at a 35-year low in September. The report showed that a number of higher-paying industries, such as construction, did add jobs at a relatively healthy pace and average hourly pay rose by 3 cents to $24.09.
Over the past year, hourly pay has outpaced inflation by 0.6 percent, rising 2.1 percent compared to the 1.5 percent inflation rate. Revised job estimates for July and August were mixed as August saw a net gain of 9,000 jobs while July’s estimate declined steeply from 104,000 to just 89,000. However, economist predict that economic growth should be somewhat higher during the first quarter of 2014 as consumer and business spending affected by the shutdown return to normal.
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