Job growth slows, while unemployment rate dips
Friday, October 6th 2006, 8:42 am
By: News On 6
WASHINGTON (AP) _ Employers added just 51,000 jobs in September, the fewest in almost a year, while the unemployment rate dropped down to 4.6 percent _ offering a mixed picture of the nation's jobs climate.
Still, the new figures released by the Labor Department on Friday suggested that although the economy has moved into a slower phase of growth, it is not in danger of sliding into a recession, analysts said.
The new tally of payroll jobs added to the economy fell short of the 120,000 positions analysts were expecting. However, job gains for both July and August turned out to be bigger than previously estimated, helping to take some of the sting out of September's tepid payroll figure.
``The report is consistent with a job market this is slowing down but is still decent,'' said Stuart Hoffman, chief economist at PNC Financial Services Group.
``It does reflect that businesses have been more cautious about new hires. But jobs are still growing and wages are still growing and that is good,'' Hoffman said. ``There is no sign in this report that the economy is on the edge of a cliff.''
The 51,000 jobs added in September were the fewest since last October, when the economy was still reeling from the blows of the Gulf Coast hurricanes.
The nation's unemployment rate dropped a notch from 4.7 percent in August to 4.6 percent, matching the rate seen in June. That dip also helped to offset any disappointment over the September payroll gain, analysts said.
Friday's snapshot is the next to the last one that Americans will get of the labor market before Election Day.
The last one will come on Nov. 3 _ just days before the November elections.
Voters' choices at the polls on Nov. 7 are likely to be shaped in part by how they are faring economically. The administration says Americans are mostly better off, while Democratic rivals disagree.
President Bush's approval rating on the economy is at 40 percent among all adults surveyed in an AP-Ipsos poll. That remains near his lowest ratings. The poll showed that people surveyed trusted Democrats to do a better job of handling the economy than Republicans.
The payrolls figure and the unemployment rate come from two different statistical surveys, which can provide _ as in Friday's case _ a somewhat mixed picture of what is happening in the labor market.
The seasonally adjusted overall civilian unemployment rate _ 4.6 percent in September _ is based on a survey of 60,000 households. It showed that 271,000 people said they found employment last month, outpacing the number of people who couldn't find work.
Economists tend to put more stock, however, in the much broader business survey of 400,000 work sites that is used to calculate the payroll figures.
On the payrolls front, job cuts at factories, retailers and government tempered job gains in construction, education and health services, and elsewhere.
In August employers added 188,000 jobs, a much stronger figure than the 128,000 reported last month. In July, 123,000 positions were added, up slightly from a previous estimate of 121,000.
Workers' average hourly earnings rose to $16.84 in September, a 0.2 percent increase from August. Economists were forecasting a 0.3 percent gain. Economists keep close tabs on wage growth for clues about inflation.
The Federal Reserve's next meeting is scheduled for Oct. 24-25. Many economists believe the policymakers will leave rates unchanged for the third meeting in a row and said Friday's report would justify such a decision.
With the economy losing speed, the central bank in August decided to halt _ for the first time _ a two-year campaign rate-raising campaign. The Fed's goal is to slow the economy sufficiently to thwart inflation but not so much as to push it into recession.
Policymakers suggested the cooling economy eventually would lessen inflation pressures.
Energy prices now seem to be cooperating with this scenario. Gasoline prices, which had topped $3 a gallon in summer, have slid and now average $2.31 a gallon.
The economy grew at a 2.6 percent pace in the spring _ less than half the pace of the first three months of the year. Growth in the July-to-September period could come about the same or even less _ at around a 1 percent pace, according to various projections.