The Clinton Herald, Clinton, Iowa

Business & Technology

October 23, 2013

U.S. hiring slows in September

WASHINGTON, D.C. — U.S. employers held back on hiring in September, a discouraging sign that the job market was weakening before a 16-day partial government shutdown began Oct. 1.

The Labor Department said the economy added just 148,000 jobs last month, a steep drop from the 193,000 created in August.

Still, the gain was enough to lower the unemployment rate to 7.2 percent from 7.3 percent in August. Unemployment remains historically high but is near a five-year low and is down from 7.9 percent at the start of 2013.

The tepid job growth makes it more likely that the Federal Reserve will maintain its level of bond purchases for the rest of this year. The bond purchases are intended to lower long-term interest rates and boost borrowing and spending. They also tend to boost stock prices by encouraging investors to dump low-yielding bonds in favor of riskier assets.

The release of the September jobs report had been delayed 2½ weeks by the shutdown, which likely further slowed economic growth and hiring. Temporary layoffs of federal workers and government contractors will probably depress October’s job gain. That means a clearer view of the job market may not emerge until the November jobs report is 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 has added an average of 143,000 jobs a month from July through September. That’s 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. ...It’s just frustratingly slow.”

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