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US adds 103,000 jobs in September

Text by News Wires

Latest update : 2011-10-07

The US Labor Department announced Friday that 103,000 jobs were added to the US economy in September, easing recession fears. Despite this, total unemployment remained rooted at 9.1%.

REUTERS  - U.S. employers hired more workers than expected in September and job gains for the prior two months were revised higher, easing recession fears.

But the unemployment rate remained stuck at 9.1 percent, keeping pressure on President Barack Obama and the U.S. Federal Reserve to do more to spur a stronger recovery.

Nonfarm payrolls rose 103,000, the Labor Department said on Friday, but part of September’s relative strength was due to the return of 45,000 striking communications workers. Excluding those workers, employment increased by a meager 58,000.

Job growth is still falling short of the pace needed to pull down unemployment, but the report had a firmer tenor than economists had expected. Hourly earnings rebounded, the length of the average work week rose and revisions showed 99,000 more jobs were added in July and August than initially reported.

In addition, the unemployment rate held steady despite a surge of new workers into the labor force.

“This is bolstering the case we are not entering a double dip but sort of muddling through,” said Robert Lutts, chief investment officer at Cabot Money Management.

U.S. stocks rose, while government bond prices extended losses. The dollar moved higher against the yen, but fell versus the euro. Economists had expected payrolls to increase 60,000 last month with the jobless rate steady at 9.1 percent.

The weak labor market poses a critical challenge for Obama, who faces a tough battle to win re-election in November 2012.

Obama has proposed a package of measures to spur jobs growth, but the plan has run into stiff opposition from Republicans, raising the prospect Washington will be unable to take decisive action.

Former Senator and Republican presidential hopeful Rick Santorum was quick to use the latest jobs figures to keep the pressure on Obama. “It’s anemic growth at best and you don’t see anything from this administration that’s going to turn it around,” he said on CNBC.

White House officials conceded the jobs growth was not good enough.


Health care, construction, retail and professional and business services all contributed to the rise in payrolls, while manufacturing was a drag for a second straight month.

The closely watched report was the latest sign to suggest the world’s largest economy was likely to skirt a recession despite weakness over the summer, although prospects for the nation’s 14 million unemployed remained grim.

“We’re still not at any kind of job level that could bring the unemployment level down, that still remains a big concern for the economy,” said Ellen Zentner, senior U.S. economist at Nomura Securities in New York.

“But nevertheless the stronger-than-expected rise in non-farm payrolls ... helps provide a little bit of relief to the markets that the U.S. economy is still hanging onto recovery.”

Private employment increased 137,000 last month, an acceleration from August’s meager 42,000 count. But government payrolls fell 34,000 as employment at the local government level fell 35,000 and the Postal Service shed 5,000 positions.

The drop in local government payrolls reflected a loss of 24,400 education jobs.

Recent reports on manufacturing, business spending and auto sales suggest the economy fared better in the third quarter after growing at an anemic 1.3 percent annual pace in the April-June period, although job growth did not pick up.

Economists warn that the U.S. economy is still not out of the woods, with Europe’s debt crisis still posing a threat that could derail the U.S. recovery.

The economy needs to grow by at least a 2.5 percent annual rate, with payrolls expanding by 125,000 positions or more a month, to keep the jobless rate from rising.


The Fed last month announced new steps to stimulate the economy by pushing long-term borrowing costs even lower by shifting assets on its balance sheet. However, economists do not expect those efforts to bear much fruit at a time many Americans are unable to access credit.

Uncertainty over the economic outlook, which continues to be muddied by acrimony in Washington over budget policy and by Europe’s inability to get to grips with its debt crisis, has made businesses reluctant to hire aggressively.

But there were some bright spots in the report.

Hourly earnings rose four cents after falling four cents in August to take them 1.9 percent above their year-ago level; the length of the work week rose to 34.3 hours from 34.2 hours; and job gains were widespread.

Health care and social services payrolls increased 40,800 jobs, construction added 26,000 workers, while temporary help payrolls—sometimes seen as a harbinger of future permanent hiring—rose 19,400.

But manufacturing, which has been the pillar of the economy, shed 13,000 jobs, the second straight monthly decline.

Date created : 2011-10-07


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