WASHINGTON – A dim view of the U.S. job market emerged Tuesday with a report that employers cut back on hiring in September just before a partial government shutdown began.
Just 148,000 jobs were added last month, a steep drop from Augusts gain, though they were enough to lower unemployment to 7.2 percent from 7.3 percent in August. The report bolsters expectations that the Federal Reserve will maintain its pace of bond purchases for the rest of 2013 to try to keep long-term loan rates low.
The governments release of the September jobs report had been delayed 2 1/2 weeks by the shutdown. Temporary layoffs during the 16-day shutdown will probably depress Octobers job gain. That means a clear picture of the job market wont emerge before November figures are issued in December.
The economy is too fragile for the Federal Reserve to touch, Sung Won Sohn, an economist at California State University, said. The shenanigans in Congress have hurt confidence and increased uncertainties, most likely hurting both consumer and business spending as well as hiring.
Average U.S. job growth has fallen sharply in the past three months after a promising start this year. The economy added an average of 143,000 jobs a month from July through September. That was down from the 182,000 average gain during from April through June and well below the 207,000-a-month pace from January through March.
The report reinforces the impression that the labor market was losing a little momentum heading in to the shutdown, said Josh Feinman, global chief economist at Deutsche Asset and Wealth Management. The labor market is continuing to create jobs. Its just frustratingly slow.
Stocks rose after the report was released, in part because slower job gains mean the Fed will continue its stimulus efforts. Economists at Barclays now predict the Fed wont trim its bond purchases until March, much later than its previous forecast of December.