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Employers added just 142,000 jobs in September

Employers added just 142,000 jobs in September

News that employment growth slowed for the second straight month in September renewed concerns about the economy and weakened the case for the Federal Reserve to raise interest rates later this year. Employers added 142,000 jobs last month, the Labor Department said Friday, far below the gains of 203,000 that economists surveyed by Bloomberg had expected.Is-America-Becoming-The-Land-Of-The-Part-Time-Job-Most-Of-The-Jobs-That-Are-Being-Created-Are-Part-Time-Jobs

The unemployment rate, which is calculated from a different survey, was unchanged at 5.1% as a sharp drop in the number of Americans employed was offset by an even steeper decline in the number working or looking for jobs, the Labor Department said Friday. Also discouraging: Employment gains for July and August were revised down by a total 59,000. Additions were revised from 245,000 to 223,200 in July and from 173,000 to 136,000 in August

In another disappointing sign, average hourly earnings ticked down 1 cent to $25.09 and are up 2.2% over the past year, roughly in line with the sluggish 2% pace that has prevailed through most of the recovery. A pickup in wage growth would give the Fed more evidence to raise its benchmark interest rate for the first time in nearly a decade. Also, the average work week slipped to 34.5 hours from 34.6 hours, possibly signaling slower hiring in the months ahead.

Concern about what the report meant about the economy initially sent stocks tumbling, with the Dow Jones industrial average initially down 258 points. But the selling quickly faded and turned into a rally as focus shifted to the fact the weak jobs growth increased the odds that the Fed won’t raise interest rates until next next year. The Dow rebounded to close up 200 points at 16,472 for a total swing of nearly 460 points from its low.

The Fed last month declined to lift the rate, citing stubbornly low inflation and spillover effects from economic troubles overseas. But Fed policymakers indicated they still expect to hoist the rate later this year, and reports on the labor market are expected to be critical to its decision. But Friday’s disappointing news raises questions about whether the slowdown reflects normal volatility or a more sustained drop in hiring that could lead the Fed to hold off until next year.