September unemployment rate holds at 9.1 percent, economy adds 103K jobs
WASHINGTON (AP) — The United States added 103,000 jobs in September, an improvement over this summer and just enough to calm fears of a new recession that have hung over Wall Street and the nation for weeks.
The Labor Department also said Friday that the nation added more jobs than first estimated in July and August. The government's first reading had said the economy added zero jobs in August.
The unemployment rate stayed at 9.1 percent.
While the report was clearly better than feared, it also showed the economy is not gaining much momentum, said Tom Porcelli, chief U.S. economist at RBC Capital Markets.
"It moves you away from the ledge," he said.
The report sent the stock market higher. The Dow Jones industrial average was up about 35 points at midday. In the bond market, yields rose, another sign that investors welcomed the news.
The unemployment report, one of the most closely watched economic indicators, showed that there are two ways of looking at the economy. On one hand, the news was encouraging for economists. Some of them had feared the nation would lose jobs, raising the risk of a devastating second recession.
But everyday Americans can't take much solace from that. Unemployment has been stuck at around 9 percent for more than two years. The economy has to add roughly 125,000 jobs a month just to keep up with population growth, more to bring down unemployment.
And it's discouraging news for President Barack Obama. The White House has acknowledged that unemployment will likely average 9 percent in 2012. That would be the highest rate any president has faced when seeking reelection since World War II.
Obama, adopting a combative tone as he prepares for next year's re-election campaign, has challenged Congress to get behind his $447 billion jobs bill or risk being run out of Washington.
The Obama plan aims to jolt the economy but cutting taxes and increasing spending on schools, roads and other public projects. He has proposed paying for it in part by raising taxes on the wealthy and corporations.
Obama's Republican rivals are trying to persuade voters that he is to blame for high unemployment and the sluggish economy. Former Massachusetts Gov. Mitt Romney told Fox News Channel on Friday that Obama is criticizing Congress simply because he is "looking for someone to blame."
The report included some signs that business activity is increasing. The temporary help industry added almost 20,000 jobs, and the length of the average workweek increased slightly. Wages also rose a bit.
More hiring and better pay could add up to more consumer spending. That accounts for 70 percent of the economy. When people spend more money, it generates demand for businesses, which hire more workers.
The private sector added 137,000 jobs, up from August but below July's revised total. The economy lost 34,000 government jobs. Local governments in particular cut teachers and other school employees.
Among the industries that added jobs in September were construction, retail, temporary help services and health care. Manufacturing cut jobs for a second straight month.
The economy returned in September to something closer to the job growth of earlier this year. In February, March and April, the nation added an average of more than 200,000 jobs a month.
But then manufacturing slowed, consumer confidence crashed, and Washington was caught in gridlock — first over whether to raise the nation's borrowing limit and then on how best to get the economy going.
Meanwhile, hiring slowed dramatically. The economy added only 53,000 jobs in May and 20,000 in June. The figures out Friday showed hiring improved in July, slowed slightly in August, and improved again in September.
Still, Federal Reserve Chairman Ben Bernanke warned Congress earlier this week that the economic recovery was "close to faltering," with slow job growth dragging down consumer confidence.
Bernanke, speaking in unusually blunt terms, said he could not blame Americans for being frustrated at the financial industry "for getting us into this mess" and at Washington for not coming up with a strong response.
August's figures were revised up to show a gain of 57,000 jobs, up from a previous estimate of zero. July was revised up to 127,000 jobs, from 85,000.
September's job gains are weaker than they appear. Nearly half came from the rehiring of 45,000 Verizon employees who had been on strike.
And more Americans are working part time even though they would prefer full-time work. That total has increased nearly 900,000 in just the past two months, which suggests that many recently created jobs have only been part time.
When part time workers are added to those without jobs who are discouraged and have given up looking, the so-called "underemployment" rate rose to 16.5 percent from 16.2 percent. That's the highest level since December.
The faltering economy has led many employers to reduce hiring. In the first half of this year, the economy grew at the slowest pace since the recession ended in June 2009. Since then, Europe's debt crisis and stock market declines have heightened fears that the economy will struggle to grow enough to avoid a recession.