Slow but steady

As U.S. adds 156,000 jobs, more seek work, lift­ing un­em­ploy­ment

Daily Local News (West Chester, PA) - - BUSINESS - By Christo­pher S. Rugaber

WASH­ING­TON >> U.S. em­ploy­ers added a de­cent 156,000 jobs in Septem­ber, even while an in­flux of job seek­ers lifted the un­em­ploy­ment rate slightly to 5 per­cent. The rise in peo­ple seek­ing work is an en­cour­ag­ing sign that Amer­i­cans are more op­ti­mistic about their prospects.

The job gain last month, though mod­est, sug­gested that the U.S. econ­omy re­mains steady if not par­tic­u­larly strong. Wages also rose and are now in­creas­ing at a health­ier pace than they were ear­lier in the eco­nomic re­cov­ery — a trend that may be draw­ing more peo­ple into the job mar­ket to look for work.

For much of the re­cov­ery, the pro­por­tion of Amer­i­cans who ei­ther had a job or were look­ing for one had been de­clin­ing as an ag­ing pop­u­la­tion led to many re­tire­ments. Many of the un­em­ployed also grew dis­cour­aged about their prospects. Oth­ers stayed in school or re­mained at home car­ing for rel­a­tives.

Yet in the past year, the pro­por­tion of adults ei­ther work­ing or look­ing for work has risen from a 40-year low of 62.4 per­cent to 62.9 per­cent. That is still far be­low pre-re­ces­sion lev­els. But the pro­por­tion has in­creased even while many peo­ple in the vast baby boom gen­er­a­tion have been re­tir­ing.

So far this year, job growth has av­er­aged 178,000 a month, down from last year’s pace of 229,000. Still, hir­ing even at this year’s

level is enough to lower the un­em­ploy­ment rate over time. And econ­o­mists have been ex­pect­ing the pace of job growth to slow as the sup­ply of un­em­ployed work­ers de­clines.

The Septem­ber hir­ing fig­ures will prob­a­bly keep the Fed­eral Re­serve on track to raise the short-term in­ter­est rate it con­trols by De­cem­ber, econ­o­mists said. Af­ter seven years of pin­ning that rate at a record low near zero to try to spur more bor­row­ing and spend­ing, the Fed raised its rate mod­estly in De­cem­ber. It has not acted since.

“The Septem­ber pay­roll re­port was a de­cent re­port that shows mod­er­ate job growth con­tin­ues,” Scott An­der­son, chief econ­o­mist

at Bank of the West, wrote in a note. “In many ways, it was a ‘Goldilocks’ num­ber — not too hot or not too cold — for the mar­ket and the Fed.”

Fri­day’s re­port also comes a month be­fore vot­ers will de­cide a pres­i­den­tial elec­tion in which the two ma­jor nom­i­nees have sketched out wildly con­flict­ing views of the econ­omy’s health and what should be done to stim­u­late its growth.

Stock in­vestors didn’t ap­pear to re­spond much to the jobs re­port. The Dow Jones in­dus­trial av­er­age fell 27 points in mid-day trad­ing. Other in­dexes also fell.

In Septem­ber, av­er­age hourly pay rose 6 cents to $25.79 and is now up 2.6 per­cent from a year ago. That’s bet­ter than the gains for most of the seven-year eco­nomic re­cov­ery, dur­ing which pay has in­creased

“The Septem­ber pay­roll re­port was a de­cent re­port that shows mod­er­ate job growth con­tin­ues. In many ways, it was a ‘Goldilocks’ num­ber — not too hot or not too cold — for the mar­ket and the Fed.” — Scott An­der­son, chief econ­o­mist at Bank of the West

at a tepid pace of about 2 per­cent a year. The pay in­creases, mod­est as they are, sug­gest that many em­ploy­ers are be­ing forced to pay more to at­tract work­ers.

Yet wage gains are still lag­ging be­hind the roughly 3.5 per­cent pace that has long been con­sis­tent with a healthy econ­omy.

Nearly all the net job gains last month oc­curred in the ser­vices in­dus­tries, in­clud­ing such higher-pay­ing ser­vices as man­age­ment and tech­ni­cal con­sult­ing, ac­coun­tants and com­puter net­work­ing.

Man­u­fac­tur­ers shed jobs for a sec­ond month in a row, cut­ting 13,000. Man­u­fac­tur­ers have strug­gled for the past 18 months as busi­nesses have re­duced their spend­ing on ma­chin­ery and other equip­ment. Don­ald Trump, the Repub­li­can pres­i­den­tial nom­i­nee, has fo­cused his eco­nomic pro­pos­als on restor­ing man­u­fac­tur­ing jobs.

Last month, con­struc­tion added 23,000 po­si­tions and re­tail 22,000. Em­ploy­ers added 15,000 jobs in a cat­e­gory

that in­cludes res­tau­rants, ho­tels and casi­nos, its slow­est gain since May. Hir­ing also slowed in the ed­u­ca­tion and health sec­tors.

Re­cent data sug­gest that the econ­omy is pick­ing up af­ter a weak start to the year, though growth is un­likely to ac­cel­er­ate very much.

Con­sumer spend­ing was flat in Au­gust, the weak­est show­ing in five months. And fac­to­ries have strug­gled as busi­nesses have put off in­vest­ing in new ma­chin­ery, com­put­ers and other equip­ment.

Still, a re­cent pri­vate sur­vey found that man­u­fac­tur­ing ex­panded in Septem­ber af­ter shrink­ing in Au­gust. Orders for fac­tory goods jumped, sug­gest­ing that out­put may rise fur­ther.

Con­sumers also ap­pear in­creas­ingly con­fi­dent about the econ­omy, which could stim­u­late a re­bound in spend­ing. Con­sumer con­fi­dence

reached a nine-year high last month.

Re­tail­ers are ex­pect­ing ro­bust spend­ing for the hol­i­day shop­ping sea­son. The Na­tional Re­tail Fed­er­a­tion projects that hol­i­day spend­ing will rise 3.6 per­cent this year from last year. That’s bet­ter than last year’s gain and slightly above the 3.4 per­cent av­er­age since the Great Re­ces­sion of­fi­cially ended in 2009.

The econ­omy ex­panded at just a tepid 1.1 per­cent an­nual pace in the first six months of the year. Still, econ­o­mists have fore­cast that growth ac­cel­er­ated to a 2.5 per­cent to 3 per­cent an­nu­al­ized pace in the Ju­lySeptem­ber quar­ter.

The slower growth hasn’t led em­ploy­ers to cut back on staffing. Ap­pli­ca­tions for un­em­ploy­ment ben­e­fits, a proxy for lay­offs, fell on av­er­age last month to a 43-year low.

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