US unemployment rate likely rose on weak hiring

[October 05, 2012]  WASHINGTON (AP) -- With a month to go until the presidential election, the government on Friday issues its September jobs report, expected to show an uptick in the U.S. unemployment rate after employers added only a modest number of jobs.

Economists forecast that the unemployment rate edged up last month to 8.2 percent from 8.1 percent, according to a survey by FactSet. Employers are expected to have added 111,000 jobs.

That would be an improvement from the 96,000 jobs gained in August. But that is still barely enough to keep up with growth in the working-age population.

The Labor Department issues the jobs report at 8:30 a.m. EDT.

An increase in the unemployment rate could add momentum to Mitt Romney's campaign to unseat President Barack Obama. Jobs and the economy were central issues in the first presidential debate Wednesday and most polls showed that voters considered Romney to have prevailed.

The job market hasn't made much progress in recent weeks. The number of people seeking unemployment benefits rose slightly last week, after a steep fall the previous week. But the four-week average of unemployment claims was unchanged at 375,000, a level consistent with only modest hiring.

Meanwhile, surveys by a trade group of purchasing managers showed that manufacturing firms hired at a faster pace last month. But services companies, such as retailers and restaurants, hired more slowly.

No incumbent since Franklin Roosevelt has faced re-election with unemployment so high. August's 8.1 rate was up from 7.8 percent when Obama took office in January 2009.

Still, the job market has been improving, sluggishly but steadily. Jobs have been added for 23 straight months. There are now 125,000 more than when Obama took office.

The administration's defenders argue that Obama shouldn't be held accountable for job losses early in his term. When he became president in the midst of the Great Recession, the economy was collapsing. In January 2009, the U.S. lost 818,000 jobs, the grimmest showing since 1949. In the first four months of his presidency, 3 million jobs vanished.

Obama's economic prescriptions, particularly an $862 billion stimulus plan, didn't kick in until months after his inauguration.

Since bottoming in February 2010, the economy has added about 4.4 million jobs. And private companies have added more than 5 million -- a figure the White House likes to emphasize.

But job gains in the private sector have been partly blunted by layoffs by state and local governments.

And as voters prepare to decide whether to back Obama or his Republican challenger, many of the job market's vital signs are faint:

- More than 5 million people have been out of work for six months or more, up from 2.7 million when Obama took office. Before 2009, in records dating to 1948, the number of long-term unemployed had never reached 3 million. Federal Reserve Chairman Ben Bernanke has called long-term unemployment a "national crisis" that is causing millions to lose job skills.

- Pay for private-sector employees, when adjusted for inflation, has dropped 1.6 percent since Obama took office. In a weak job market, employers have little reason to offer significant raises.

- The percentage of Americans either working or looking for work fell to a 31-year low of 63.5 percent in August. That's partly because the vast generation of baby boomers has begun to retire. But another key factor is that hundreds of thousands of Americans have given up looking for work.

- More than 23 million Americans are either unemployed, stuck in part-time jobs because they can't find full-time work or want a job but have stopped looking. Romney used that figure to attack Obama's economic policies in Wednesday night's debate.

Few economists expect the job market to return to full health soon. The Federal Reserve, for instance, doesn't foresee unemployment falling below a normal level of roughly 6 percent before 2016.

The U.S. economy, slowed by government cuts, weak manufacturing, a European economic crisis and tepid consumer spending, has been growing at a meager annual pace well below 2 percent. That is too tepid to generate strong job growth and significantly reduce unemployment.

Growth was only 1.3 percent at an annual rate in the April-June quarter, and most economists expect it will remain at or below 2 percent for the rest of this year.

Europe's financial crisis has pushed six of the 17 countries that use the euro into recession. Growth has also slowed in large developing countries such as China and India. Both trends are cutting into U.S. exports.

Many U.S. companies are also reluctant to step up hiring or investing because of the year-end "fiscal cliff." That's when a package of large tax increases and steep spending cuts are scheduled to take effect. Unless Congress agrees to postpone the cuts, the economy could be pushed back into recession.

[Associated Press; By PAUL WISEMAN and CHRISTOPHER S. RUGABER]

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