Published on Friday, October 8, 2004 by Reuters
US Job Growth Weaker Than Expected
by Glenn Somerville
WASHINGTON - U.S. businesses added 96,000 jobs to payrolls in September, the government reported on Friday, a weaker-than-expected total that was expected to sharpen a presidential debate later in the day over the economy's direction.
The Labor Department report, showing the unemployment rate in September held steady at 5.4 percent, will provide fodder for the second debate between President Bush and Democratic Presidential contender Sen. John Kerry. It was the final jobs report before the Nov. 2 presidential election with polls indicating that jobs are of paramount concern to voters.
The September job-creation total came in below Wall Street economists' forecasts for 148,000 new jobs. The department also revised down its estimate of August new jobs to 128,000 from 144,000 it reported a month ago.
Most jobs in September came in the services sector, while manufacturers shed 18,000 jobs last month after increased hiring in the two prior months.
Though four hurricanes swept through the Southeast during August and September, which Labor said likely held down employment growth, it concluded the impact was minimal.
The Bureau of Labor Statistics commissioner, Kathleen Utgoff, said "we do not believe the net result of...(the hurricanes) materially changes the national employment situation, but we cannot precisely quantify the weather effects."
Analysts described the jobs number as weak.
"It is a disappointing number, it suggests the economy is still not growing particularly quickly," said economist David Sloan of 4Cast Ltd. in New York. The U.S. Federal Reserve has raised short-term interest rates three times this year -- from 46-year lows in June -- to 1.75 percent and analysts said the jobs report left room to keep raising them but not by much.
"For the Fed, I think our view has been for a while that the next move will be the last one and that the fed funds rate stays at 2 percent until the end of 2005," predicted Jason Daw, a foreign exchange strategist at Merrill Lynch in New York.
The dollar dropped sharply against the euro after the number was issued, apparently in the belief it raised questions about the durability of U.S. economic growth, while bond prices increased.
Labor also said that, according to preliminary estimates, the economy added about 236,000 more jobs than previously thought in the year ended March 2004, and it will incorporate the change into benchmark revisions issued in February.
After including the projected change, it appears that about 585,000 jobs have been lost since President Bush took office in January 2001.
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