Jobless Rate Drops to 4.6 Percent
The U.S. economy added 51,000 new jobs in September, the fewest since October 2005, according to the U.S. Department of Labor. But that was good enough to drop the unemployment rate to 4.6 percent from 4.7 percent last month.
"I think the number was surprisingly low," says Roy Krause, CEO of staffing company Spherion, "but our business has been pretty stable. "We're seeing employment expand at a moderate rate rather than the explosive growth you see during boom-bust periods."
This report follows nonfarm payroll gains of 123,000 in July and 188,000 in August, a number that was revised upward by a massive 60,000 in this morning's report. The three-month average of jobs growth is a solid 121,000, pretty much the number of jobs that analysts think the economy needs to create to continuing growing.
"This pace of jobs growth is consistent with a soft landing for the economy with second-half growth in the range of 3 percent," writes University of Maryland business Prof. Peter Morici in an analytical note.
And an even bigger change in the job numbers is on its way. In a preliminary estimate, the department's Bureau of Labor Statistics announced it will be revising payroll numbers for the 12 months ended in March 2006 by 810,000, an average of 68,000 new jobs a month. That's up 45 percent from the 1.8 million jobs that the BLS currently estimated were created during that period.
"The economy still looks solid with [these] upward revisions to job growth pending," notes economist Robert Brusca at FAO Economics.
Where did the jobs come from last month? Healthcare employment continued to grow, with a gain of 24,000 in September. Since December of last year, healthcare employment has increased by 231,000. Financial activities gained 16,000 jobs in September as employment continued to trend up in the credit and insurance sectors. The over-the-month gain was about in line with the industry's average monthly gain during the past year. And in another sign of the cooling housing market, real-estate employment was flat over the month and has shown no net change since April. Also, manufacturing lost 19,000 jobs in September.
Average hourly earnings of private-sector workers rose by 4 cents, or 0.2 percent, in September to $16.84, seasonally adjusted. Average weekly earnings also increased by 0.2 percent in September to $569.19. Over the year, both average hourly and weekly earnings increased by 4.0 percent.