The unemployment rate fell to its lowest level since November 2008, but the government’s latest jobs report still shows a muddled picture of the economy.
According to the September jobs report, which was delayed 18 days by the government shutdown, hiring slowed last month. But the unemployment rate fell as more workers said they got jobs and joined the labor force.
Employers added 148,000 jobs in September, fewer than the 193,000 jobs added in August, the Department of Labor reported.
But the good news is the unemployment rate fell to 7.2 percent as 73,000 people joined the labor force and 133,000 people said they got jobs. That’s considered encouraging, after months in which thousands of Americans were dropping out of the workforce.
Still, 11.3 million jobless people continued to look for work.
As usual, African Americans make up a large percentage of that population. According to the jobs report, 12.9 percent of Blacks were unemployed last month down ever so slightly from 13.0 percent. The unemployment rate for Blacks has stayed around 13 percent since September 2012 except for a dip to 12.6 percent in July 2013.
At the same time, the participation rate of African Americans in the workforce has inched up to 61.3 percent after bouncing up and down between 60 and 61 percent.
Steven C. Pitts, associate chair of the U.C. Berkeley Labor Center, and author of the center’s monthly Black worker report, is not surprised that there is virtually no movement in the African American unemployment numbers and points to several key reasons—the Black-White disparity and the overall poor performance of the economy.
“The disparity is a 60-year-old problem,” says Pitts. “And the actual (unemployment) level is a function of the poor economy; as long as policies in Washington, D.C., don’t aggressively expand the economy this will happen.”
And Pitts is pessimistic that anything is going to change in the near term because the conversations in Washington are focusing on deficit and debt reduction, which the economist called inherently contractionary and that works against job creation.
The conflicting picture for the September jobs report comes from two separate surveys conducted each month, which don’t always match up. The first survey asks businesses and government agencies about their hiring, while the second survey covers employment status of individual households.
The cloudy picture of the job market isn’t likely to clear up anytime soon. The economic impact from the shutdown is expected to show up in the October jobs report. Its release will also be delayed until Nov. 8.
That makes it unlikely that the Federal Reserve will start cutting back on stimulus this month.
The Fed meets next week to reevaluate its plan for winding down its bond-buying program. But independent economists expect policymakers will want to see more data on how the shutdown impacted the economy before they start cutting back on the $85 billion a month in bond purchases.
Stocks rose Tuesday as investors largely interpreted the lower unemployment rate as a sign that the Fed will continue stimulating the economy in the months ahead.
Construction firms added 20,000 jobs in September, more than the previous five months combined. Temp agencies hired 20,000 workers and state governments added 20,000 education jobs.
Retailers hired 21,000 workers, marking six straight months of strong hiring for the sector.
Meanwhile, restaurants and bars suddenly cut 7,000 jobs—the first job loss in the industry in three-and-a-half years.
The average American employee worked 34.5 hours a week and earned $24.09 an hour in September, up 49 cents, or 2.1 percent from a year ago.
