US hir­ing slower in Septem­ber as global econ­omy weak­ened

The China Post - - FRONT PAGE -

U.S. hir­ing slowed sharply in Septem­ber, and job gains for July and Au­gust were lower than pre­vi­ously thought, a sour note for a la­bor mar­ket that had been steadily im­prov­ing.

The U.S. La­bor Depart­ment said Fri­day that em­ploy­ers added just 142,000 jobs in Septem­ber, de­pressed by job cuts by man­u­fac­tur­ers and oil drillers. The un­em­ploy­ment rate re­mained 5.1 per­cent, but only be­cause more Amer­i­cans stopped look­ing for work and were no longer counted as un­em­ployed.

All told, the pro­por­tion of Amer­i­cans who ei­ther have a job or are look­ing for one fell to a 38-year low.

Some of that de­cline likely re­flects baby boomer re­tire­ments, but it also in­di­cates that many Amer­i­cans re­main dis­cour­aged about their job prospects. Mod­est growth and steady, if un­spec­tac­u­lar, hir­ing hasn’t en­cour­aged more peo­ple to look for work.

Av­er­age hourly wages also slipped by 1 U.S. cent and have now risen by only 2.2 per­cent in the past year.

U.S. con­sumers are spend­ing at a healthy pace, boost­ing job gains in sec­tors like re­tail and ho­tels and restau­rants. But lack­lus­ter growth over­seas has sharply re­duced ex­ports of fac­tory goods.

China, the world’s sec­ond-largest econ­omy, is slow­ing. Europe is still weak. Emerg­ing economies such as Brazil and Tur­key are strug­gling to grow at all. Sharply lower oil prices have also prompted drilling firms to lay off work­ers and slash spend­ing on steel pipe and other equip­ment.

The tepid pace of hir­ing com­pli­cates the pic­ture for the Fed­eral Re­serve, which is de­cid­ing whether to raise short-term in­ter­est rates later this year for the first time in nine years.

U. S. Fed­eral Re­serve

Chair Janet Yellen has said that the job mar­ket is nearly healed. But she has added that she wants to see fur­ther hir­ing and wage gains to in­crease her con­fi­dence that in­fla­tion will move closer to the Fed’s tar­get of 2 per­cent.

“Ev­ery as­pect of the Septem­ber jobs re­port was dis­ap­point­ing,” said Michelle Gi­rard, an economist at RBS Se­cu­ri­ties. It “strength­ens the case that the Fed will be forced to stay on hold over the re­main­der of the year.”

US Stocks Tum­ble on

Weak Jobs Re­port

Stock in­dex fu­tures and bond yields fell af­ter the pay­roll fig­ures came in far weaker than econ­o­mists were ex­pect­ing.

Job gains have av­er­aged 198,000 a month this year, a solid to­tal, but be­low last year’s av­er­age of 260,000.

Con­struc­tion firms added 8,000 jobs and pro­fes­sional ser­vices, which in­cludes ac­count­ing and ar­chi­tects, gained 31,000. Gov­ern­ment added 24,000 jobs. But fi­nan­cial ser­vices re­ported no gain, and hir­ing in ed­u­ca­tion and health fell to the low­est level in nearly a year.

Some re­cent data has pointed to a healthy econ­omy: Sales of new U.S. homes have jumped to a seven-year high, and auto sales soared nearly 16 per­cent in Septem­ber to the high­est level in a decade.

At the same time, the dol­lar has risen about 15 per­cent against over­seas cur­ren­cies in the past year, mak­ing U.S. goods more ex­pen­sive over­seas and im­ports less ex­pen­sive. A sharp fall in ex­ports has likely slowed growth in the July-Septem­ber quar­ter to an an­nual rate of just 1.5 per­cent, ac­cord­ing to econ­o­mists from JPMor­gan Chase. That’s down from a 3.9 per­cent pace in the April-June quar­ter.

Wall Street stocks opened sharp- ly lower Fri­day af­ter the Septem­ber em­ploy­ment re­port showed the U.S. econ­omy added just 142,000 jobs last month.

Five min­utes into trade, the Dow Jones In­dus­trial Av­er­age was at 16,031.73, down 240.28 points (1.48 per­cent).

The broad-based S&P 500 fell 28.57 (1.49 per­cent) to 1,895.25, while the tech-rich Nas­daq Com­pos­ite In­dex dropped 69.32 (1.50 per­cent) to 4,557.77.

The jobs re­port fell far short of es­ti­mates that the U.S. econ­omy added 205,000 jobs in Septem­ber. The La­bor Depart­ment also trimmed its es­ti­mates for jobs growth in July and Au­gust.

An­a­lysts low­ered the odds the Fed­eral Re­serve will im­mi­nently raise in­ter­est rates.

“This data helps the case for the Fed to stay on hold in Oc­to­ber,” said Jim O’Sul­li­van, chief U.S. economist at High Fre­quency Eco­nom­ics.

Newspapers in English

Newspapers from Taiwan

© PressReader. All rights reserved.