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Policy: Labor

Delayed September jobs report disappoints: 148,000 new jobs; unemployment rate at 7.2 percent

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Jobs,Labor,Debt Ceiling,PennAve,Joseph Lawler,Economy,Government Shutdown,Unemployment

The U.S. labor market remained stuck in a rut in September, as the number of new jobs created fell to 148,000 and the unemployment rate edged down to 7.2 percent, the Labor Department announced in an unusual Tuesday release of a report that had been delayed by the 16-day government shutdown.

The headline number of non-farm payroll jobs fell short of analysts' expectations and fell from August's revised number of 193,000. July's number was revised further downward, from 104,000 to just 89,000.

The slight improvement in the unemployment rate appears to have been driven by Americans finding new jobs, rather than by people dropping out of the work force, with the labor force increasing by 73,000 in September. The labor participation rate, however, remained unchanged at 63.2 percent. A broader measure of unemployment that includes underemployment ticked down from 13.7 to 13.6 percent.

Long-term unemployment remains steeply elevated, with 4.1 million Americans looking for a job for 27 weeks or longer, down from 4.3 million in September. While the long-term unemployed remain about 37 percent of all those looking for work, the number has fallen by 725,000 over the past year.

Two other important indicators of the health of the labor market, earnings and hours, showed little improvement in September. Average hourly earnings increased by 3 cents a week, and the average workweek was unchanged at 34.5 hours.

The September jobs report did little to change the picture of the larger trend of the U.S. labor market leading into the three-week government shutdown. Since the labor market recovery began in 2010, the average monthly jobs growth has been just under 180,000, with relatively few months recording growth significantly larger or smaller than that number.

The past three months have seen an average growth of just under 144,000 jobs. Over the past year, the average monthly gain has been slightly above 185,000.

Those numbers have been slightly depressed since the across-the-board federal spending cuts known as sequestration took effect in March. In the following months, job growth has averaged roughly 163,000.

A faster recovery is needed to restore the economy to full health and bring back workers who dropped out of the labor force over the past five years. At the current rate of recovery, it would take more than six years to close the “jobs gap” of over 8 million jobs and achieve a pre-recessionary level of employment, according to the Hamilton Project's estimates. That assumes that the long, slow economic recovery that has taken place since the official end of the recession in June 2009 is not interrupted by another recession.

One factor that may have been holding back a stronger recovery, governments’ shedding of jobs, appeared to have ramped up in September, even before the lapse in federal funding caused widespread furloughs. The federal government, apart from the post office, lost 7,300 jobs, for a total of 65,000 losses over the past year. State governments, on the other hand, added 22,000 jobs in September, while local governments continued to grow, with 6,000 new workers in September.

The number of Americans working part time because their hours were cut or they couldn't find full-time work increased by 15,000 in September. But that number has fallen by 300,000 since June, and is only slightly up year-over-year.

Tuesday's jobs report was an anomaly. Normally, the Bureau of Labor Statistics publishes the report on the first Friday of each month. But when the fiscal year ended on Sept. 30 without Congress approving new funding, the Labor Department had to stop collecting and reporting data. Because of the backlog of work, the BLS has announced, October's jobs report will be delayed by a week, coming out Nov. 8 rather than on Nov. 1.

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Author:

Joseph Lawler

Economics Writer
The Washington Examiner