The Big Takeaway From the September Jobs Report: The Economy Is Stalling

The U.S. economy added 148,000 jobs and unemployment fell to 7.2 percent in September. That’s not good news.

Traders work on the floor of the New York Stock Exchange minutes before the closing bell on October 8, 2013 in New York City. 
National Journal
Matt Berman Catherine Hollander
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Matt Berman Catherine Hollander
Oct. 22, 2013, 5:36 a.m.

You’d be for­giv­en for be­ing bored by the Septem­ber jobs re­port. There is noth­ing sexy about the latest num­bers, which were re­leased Tues­day morn­ing: The eco­nomy picked up 148,000 jobs and un­em­ploy­ment fell slightly to 7.2 per­cent. The re­port was not heart­en­ing, par­tic­u­larly as the coun­try gears up for an­oth­er round of year-end budget talks, which have led to con­fid­ence-dam­aging fights in the past.

The key phrase for the Septem­ber re­port is “little change.” The total num­ber of un­em­ployed Amer­ic­ans is little changed from Au­gust at 11.3 mil­lion. The eth­nic break­downs among the un­em­ployed were also little changed, as was the num­ber of long-term un­em­ployed (people job­less for at least 27 weeks), which stood at 4.1 mil­lion for Septem­ber. The U-6 rate, a broad­er meas­ure of un­em­ploy­ment that in­cludes people “mar­gin­ally at­tached” to the labor force, as well as people em­ployed part-time for eco­nom­ic reas­ons, de­clined only slightly to 13.6 per­cent in Septem­ber from 13.7 per­cent the pre­vi­ous month.

Douglas Holtz-Eakin, the former Con­gres­sion­al Budget Of­fice dir­ect­or, de­scribed the num­bers as “lackluster, tep­id, list­less, or soft.”

That may prove to be the most pos­it­ive news for jobs growth for the rest of the year. The Oct. 16 agree­ment to end the na­tion’s par­tial gov­ern­ment shut­down and avert de­fault on the coun­try’s bor­row­ing lim­it set up an­oth­er round of fisc­al fights and con­gres­sion­al con­ten­tion at the end of the year. Pre­vi­ous budget battles have proven to be less than help­ful for the mud­dling re­cov­ery. Septem­ber’s re­port pred­ates the cul­min­a­tion of the most re­cent fisc­al show­down, whose ef­fects are more likely to be found in the Oc­to­ber em­ploy­ment re­port.

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Just how bleak are the Septem­ber num­bers? They don’t even beat the av­er­age of what has been a pretty tep­id year for growth. Over the pre­vi­ous 12 months, the U.S. eco­nomy av­er­aged 185,000 job gains per month, ac­cord­ing to the Bur­eau of Labor Stat­ist­ics.

The un­em­ploy­ment rate is still crawl­ing to­ward the 7 per­cent level where the Fed­er­al Re­serve has said it will con­sider wind­ing down its bond-buy­ing stim­u­lus pro­gram, and is at its low­est level since Novem­ber 2008. Paul Ash­worth, the chief U.S. eco­nom­ist at mac­roe­co­nom­ics re­search firm Cap­it­al Eco­nom­ics, said Tues­day’s re­port is likely to re­in­force the mar­ket’s ex­pect­a­tion that the Fed would con­tin­ue its as­set-pur­chase pro­gram in­to early 2014.

The Septem­ber re­port was ori­gin­ally sched­uled to be re­leased on Oct. 4, but was delayed by the gov­ern­ment shut­down. The Oc­to­ber jobs re­port will be re­leased one week late, on Nov. 8.

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