The nation added 103,000 jobs in September, the Labor Department said Friday, and added 99,000 more in the previous two months than had earlier been estimated. While nowhere near enough to put the nation’s millions of jobless back to work — the unemployment rate was unchanged at 9.1 percent — the fresh data were enough to ease fears of sliding into an outright contraction in the economy. It was merely mediocre, not the horrible result that some economists had feared.
“It should help calm some of the fears that the economy is falling back into recession,” said Michelle Meyer, a senior economist at Bank of America Merrill Lynch.
Job creation was softer than it appeared at first glance — it was inflated by 45,000 Verizon workers on strike in August who went back to work in September. But against a backdrop of turbulent global financial markets, fears of a deep new financial crisis in Europe and widespread fears of a double-dip downturn, the numbers offer a measure of reassurance that employers are merely slowing their hiring, not slashing positions.
The White House pointed to the soft job-creation numbers as reason for Congress to either pass President Obama’s $447 billion job creation plan or find an alternative that might help growth. It came after a week in which House Republican leaders rejected the president’s plan as written, but some Republicans have signaled openness to aspects of the plan, such as continuing a payroll tax cut scheduled to expire at the end of the year.
“The jobs numbers were better than projected, but nowhere near the type of job growth we need to reduce unemployment and start getting the long-term unemployed back to work,” Gene B. Sperling, who heads the White House National Economic Council, said in an interview. “Anyone who suggests that we should not take bold action on jobs immediately is essentially saying that projections of weak growth and over 9 percent unemployment are good enough for them. It’s certainly not satisfactory for the president.”
On Capitol Hill, Republicans blamed failed White House leadership for the still-high unemployment rate. House Speaker John A. Boehner (Ohio) said in a statement that the report “underscores the urgency for both parties to find common ground on common-sense solutions to create a better environment for private-sector job creation.”
“Our unemployment rate has been higher than 8 percent for more than 21
2 years, far above what the Obama administration promised with the ‘stimulus,’ ” Boehner said. “For many groups, including teenagers, Hispanics and African Americans, the jobless rate is even higher. These sad numbers show that more Washington spending, threats of higher taxes on small businesses and excessive government regulations don’t create a healthy environment for job growth.”
The market for Treasury bonds, which usually moves based on investors’ economic expectations, on Friday was showing greater confidence that the United States can skirt a recession. The yield the U.S. government must pay to borrow money for a decade rose to 2.06 percent, from 1.99 percent, suggesting less fearfulness among investors. The stock market fell, however, with the Standard & Poor’s 500 off 0.8 percent Friday.
Although financial markets have been flashing signals that a recession could be imminent, or already underway, the September jobs report is actually consistent with other economic data, which have suggested gradual economic expansion. For example, key surveys on the manufacturing and services sectors released this week by the Institute for Supply Management both pointed to continued slow growth in September.
But the unemployment rate is likely to move up over time if the current rate of job creation is sustained. The nation has added 96,000 net new jobs a month over the past six months, which is too weak to accommodate the 125,000 or so additional Americans who join the labor force every month.
“While it may help us to just barely escape a recession call, the gain in jobs and incomes is likely too little to blunt consumer pessimism,” said Kathy Bostjancic, an economist at the Conference Board, a business research group. “The main problem is that demand is simply too weak to support more robust job growth.”
In a surprising development, the Federal Reserve said Friday that the amount of consumer credit outstanding in the economy fell $9.5 billion in August, which followed 10 consecutive months of gains. The decline could signal that consumers are becoming more cautious or lenders are cutting back on making loans available, or some combination thereof.
In a positive sign in the September report, both average hourly earnings and the length of the average workweek rose, such that average weekly earnings jumped by $3.68, or 0.5 percent, to $793.02.
Aside from the information sector, which was boosted by returning Verizon strikers, the strongest sectors for job creation were professional and business services, which added 48,000 jobs, with particular strength in computer systems design and technical consulting services. The health-care industry added 44,000 jobs. In a pleasant surprise, the long-ailing construction sector added 26,000 jobs.
The biggest job loser was government, with 5,000 jobs cut by the U.S. Postal Service and 35,000 jobs slashed by local governments.
Even as job growth continued in September, the situation remained dire for those who have been unemployed for long periods. The number of people who have been unemployed for more than six months rose by 208,000, to 6.2 million. And a broader measure of the unemployment rate, which captures those who have given up looking for a job out of frustration or who are working part time but want full-time work, rose to 16.5 percent, from 16.2 percent.
Staff writer Felicia Sonmez contributed to this report.