|
 Payrolls outside of farming rose by 142,000 last month and August
figures were revised sharply lower to show only 136,000 jobs added
that month, the Labor Department said on Friday.
That marked the smallest two-month gain in employment in over a year
and could fuel fears that the China-led global economic slowdown is
sapping America's strength.
"You can’t throw lipstick on this pig of a report," said Brian
Jacobsen, a portfolio strategist at Wells Fargo Funds Management in
Menomonee Falls, Wisconsin.
The weak job growth took Wall Street by surprise and U.S. stocks
sold off while the dollar also weakened and yields for government
bonds fell.
Bets on interest rate futures showed investors only saw a 30 percent
chance of a Fed rate hike in December, down from just under 50
percent before the job report's release.
"(With) a weak report here, in combination with some of the other
weakness that we are seeing across the globe, the odds get dinged
for December," said Tom Porcelli, an economist at RBC Capital
Markets.
Investors saw virtually no chance the Fed would end its near-zero
interest rate policy at its only other scheduled meeting this year,
to be held later in October. Futures prices indicated investors were
betting the Fed would probably hike in March.
U.S. factories are feeling the global chill and shed 9,000 jobs in
September after losing 18,000 in August, according to the Labor
Department's survey of employers.
"We saw events in China lead to some global financial turmoil and
you're seeing that in the data here," White House chief economist
Jason Furman told Reuters.
New orders received by U.S. factories fell 1.7 percent in August,
the Commerce Department said in a separate report..
Paul Ryan, a top Republican lawmaker in the House of
Representatives, said the weak turn in the economy should be a
wake-up call for Washington to reform the national economy with new
tax laws, free trade agreements and policies to get people off
welfare. "This recovery continues to disappoint, but we can't accept
it as the new normal," Ryan said.
The recent pace of job growth should have been enough to push the
unemployment rate lower because only around 100,000 new jobs are
needed a month to keep up with population growth.
But the jobless rate held steady at 5.1 percent. The unemployment
rate is derived from a separate survey of households that showed
350,000 workers dropping out of the labor force last month, as well
as a lower level of employment.
[to top of second column] |
The share of the population in the work force, which includes people
who have jobs or are looking for one, fell to 62.4 percent, the
lowest level since 1977.
Average hourly wages fell by a cent to $25.09 during the month and
were up only 2.2 percent from the same month in 2014, holding around
the same levels seen all year and pointing to marginal inflationary
pressures.
The report did have a few bright spots that might be welcomed by Fed
chief Janet Yellen, who said last week the economy was doing well
enough to warrant higher rates this year.
The number of workers with part-time jobs but who want more hours
fell by 447,000 in September to 6.0 million.
Yellen has signaled that the elevated number of these workers points
to hidden slack in the labor market that isn't captured by the
jobless rate. A measure of joblessness that includes these workers
and is closely followed by the Fed fell to 10 percent, its lowest
level since May 2008.
Economists polled by Reuters had expected job growth of 203,000 in
September.
All told, revised estimates meant 59,000 fewer jobs were created in
July and August than previously believed.
In another grim sign, the number of hours worked in the country fell
0.2 percent, raising the specter that some broader softness might
have gripped the economy last month.
Some of the strongest headwinds on the U.S. economy come from the
commodity sector, which has slowed in part because of weaker demand
from China.
The price of oil has fallen nearly 50 percent over the last year,
and U.S. mining payrolls, which include energy sector jobs, fell by
10,000 in September, the ninth straight month of declines.
(Reporting by Jason Lange; Additional reporting by Rodrigo Campos
and Karen Brettell in New York; Editing by Andrea Ricci)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |
