Business, Economics and Jobs

US unemployment rate falls to 7.2 percent in September, jobs growth slows


Matthew Giarmo of Alexandria, Virginia, who lost his contract job with the Department of Health and Human Services in 2012, holds up a sign seeking a job with a lower salary than he would normally ask for on a street corner in Washington, D.C. on Oct. 8, 2013.


Alex Wong

The US Bureau of Labor Statistics released the September employment report on Wednesday — nearly three weeks late due to the 16-day government shutdown — and financial markets liked what they saw, but not for reasons you might think.

The jobless rate fell to 7.2 percent in September, compared with 7.3 percent in August, marking the best reading for the world’s largest economy since November 2008 when the country toppled into the worst recession in several generations.

Great news, you would say. Sure, a lower jobless rate is always a crowd pleaser, but that’s not what got markets cheering.

It may seem counterintuitive, but investors liked the disappointing jobs growth figure: just 148,000 new jobs were created in September compared with expectations of 180,000. The figure, though not directly affected by the government shutdown which began on Oct. 1, may have been hurt by the uncertainty created by the political shenanigans in Washington. 

The number was significantly lower than the 193,000 gain in August, which was revised up from 169,000.

Most of the jobs growth was in retail trade, transportation, warehousing, construction and temporary-help industries. 

On average, US employers have added 143,000 jobs a month from July through September, down from 182,000 from April through June.

That is a bad sign for the economy because it suggests employers are increasingly reluctant to hire. Jobs growth is essential to get the economy growing at a faster clip. 

But it’s a shot of good news for stimulus-addicted investors because it increases the likelihood of the Federal Reserve extending its monthly $85 billion bond-purchasing program, which is designed to lower long-term interest rates, spur spending and boost employment. The benchmark S&P 500 was up 0.43 percent in early afternoon trade at 1,752.11.

“Had this report come in strong, there was some possibility of the Fed tapering in December, but that possibility seems to be very small now,” JPMorgan Chief US Economist Michael Feroli was quoted as saying.

The partial government shutdown, which ended last Thursday after US lawmakers struck a compromise deal, may have further depressed economic growth and hiring in October.


#next_pages_container { width: 5px; hight: 5px; position: absolute; top: -100px; left: -100px; z-index: 2147483647 !important; }


#next_pages_container { width: 5px; hight: 5px; position: absolute; top: -100px; left: -100px; z-index: 2147483647 !important; }

#next_pages_container { width: 5px; hight: 5px; position: absolute; top: -100px; left: -100px; z-index: 2147483647 !important; }