Jobless rate in U.S. bewilders analysts
By Peter G. Gosselin
Los Angeles Times
WASHINGTON — American employers cut payrolls in September, but the nation's unemployment rate still fell to 5.6 percent, the Labor Department reported yesterday. The report left analysts puzzled over which way the economy is headed.
Some economists said that the tenth-of-a-point drop in the jobless rate, together with an upward revision of August's job gains from 39,000 to 107,000, showed an economy on the mend.
But others said the renewed loss of jobs last month, the first such drop in five months, and an increase in the number of long-term unemployed — meaning those out of work for six months or more — suggest that growth is faltering.
"The labor market is in a holding pattern; the economy is moving sideways," said Princeton University economist Alan B. Krueger.
The muddled picture is likely to have some immediate effects. What strength there was in the new numbers could convince the Federal Reserve that there is no immediate need to cut interest rates further. And it complicates efforts of congressional Democrats to extend a program due to expire Dec. 28 that gives the jobless 13 weeks of extra unemployment benefits.
The most widely watched numbers in the jobs report appeared to barely budge in September. The number of unemployed workers slipped slightly from 8.14 million in August to 8.09 million last month. The unemployment rate for blacks remained unchanged at 9.6 percent. The rate for Latinos slipped a tenth of a point to 7.4 percent.
But a variety of analysts saw signs of weakness behind the new numbers and warned that the economy may be headed for another "jobless" recovery like that of the early 1990s.
Though not particularly large, the loss of 43,000 jobs in September snapped a four-month streak of job growth and included steep new declines in manufacturing.
U.S. factories cut payrolls by 63,000 in August and an additional 35,000 last month. The new declines stretched job losses in the manufacturing sector into a third year and boosted the loss total to 1.9 million.
Battered by the decline in air travel after last year's terror attacks, airlines cut 12,000 workers last month. Retailers, who were thought to have been profiting from consumers' willingness to keep buying, reduced payrolls by 16,000.
Among the few industries to add workers in September were healthcare (21,000) and, because of the refinancing boom, mortgage banking (9,000). The federal government added 11,000 workers, most of them airport security guards.
