Anemic September Job Growth Raises Worries Over Economy’s Future

Oct 2, 2015
This article is part of a series called News & Trends.

Econ Index Sept. 2015The government delivered unexpected job news this morning, reporting that September posted a surprisingly small 142,000 increase in U.S. employment. The report from the U.S. Labor Department was well below the 203,000-206,000 increase forecast by economists.

Compounding the disappointing news, the department’s Bureau of Labor Statistics adjusted downward its previous counts for July and August by a combined 59,000 jobs. With today’s report, the average monthly job growth for the third quarter comes to 167,000. That contrasts sharply with the 213,000 monthly average for the first six months.

Unemployment was unchanged at 5.1 percent, a reflection of the continuing decrease in the labor force. The participation rate — the ratio of the number of individuals working and those unemployed but wanting to work compared to the civilian population — declined to 62.4 percent.

Average hourly wages, which rose a robust .4 percent in August, declined slightly in September.

Economists were not expecting September’s numbers to be so low. Surveys showed them anticipating a return to the 200,000-plus range. Most predicted that August’s initial 173,000 was more likely due to the sudden gyrations in the stock market and temporary worries over China’s slowing economy.

Expectations were buoyed when ADP announced Wednesday that the private sector added 200,000 new jobs. Though the HR services firm’s employment report rarely synchs withe the BLS report, it typically points in the right general direction.

Other private reports suggest there may be more weakness in the U.S. economy than many suspected. Earlier this week global outplacement consultancy Challenger, Gray & Christmas said the nation’s companies announced 58,877 job layoffs last month. Lead by Hewlett Packard, which said it would be laying off 30,000 workers, the month’s layoffs brought the total for the year to 493,431. For all of last year the outplacement firm reported 483,171 announced layoffs.

How this will influence the Federal Reserve decision on raising interest rates is unclear. Though the Fed last month postponed the first increase in almost a decade, Chairwoman Janet Yellen said one would almost certainly occur before the end of the year. But today’s anemic jobs report and other signs of economic weakness could give the Fed a reason to wait.

Indeed, were it not for robust government hiring last month — education accounted for 13,600 of the 24,000 new government jobs — the report would have been weaker still. The private sector added only 118,000 jobs.

Healthcare showed the biggest increase, as it typically has, adding 34,400 jobs. Bars and restaurants accounted for 20,700. The broad professional and technical services category added 17,700. The category, which includes legal services, accounting and bookkeeping firms, architects, was lead by 7,000 new jobs in computer design and related services. Retailers increased their payrolls by 23,700 workers, with general merchandisers accounting for 10,000 new jobs.

The biggest losers were in mining, which includes the petroleum industry. Jobs in that sector declined by 13,000. Manufacturing lost 9,000 jobs. Construction jobs increased by 8,000.


This article is part of a series called News & Trends.
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