Posted on October 13, 2016Boston Globe Business & Tech
By Christopher S. Rugaber AP Economics Writer
October 07, 2016
WASHINGTON — U.S. employers added 156,000 jobs in September, a decent gain that reflects a healthy economy but also a sign that hiring has slowed from its robust pace last year.
The unemployment rate ticked up to 5 percent from 4.9 percent, but mostly for a positive reason: More Americans came off the sidelines and looked for work, though not all of them found jobs.
Job growth has averaged 178,000 a month so far this year, down from last year’s pace of 229,000. Still, hiring at that level is enough to lower the unemployment rate over time. Economists have expected the pace to slow as the supply of unemployed workers declines.
The hiring figures could keep the Federal Reserve on track to raise the short-term interest rate it controls by December. After seven years of pinning that rate at a record low near zero to try to spur more borrowing and spending, the Fed raised its rate in December. It has not acted since.
But the Fed signaled after its policy meeting last month that it would likely act in the coming months. The Fed will meet in November, just before the election, but analysts expect it to hold off until the campaign ends.
Recent data suggest that the economy is picking up after a weak start to the year, though growth is unlikely to accelerate very much.
Consumer spending was flat in August, the weakest showing in five months. And factories have struggled as businesses have put off investing in new machinery, computers and other equipment.
Still, a recent private survey found that manufacturing expanded in September after shrinking in August. Orders for factory goods jumped, suggesting that output may rise further.
Consumers also appear increasingly confident about the economy, which could stimulate a rebound in spending. Consumer confidence reached a nine-year high last month.
Retailers are expecting robust spending for the holiday shopping season. The National Retail Federation projects that holiday spending will rise 3.6 percent this year from last year. That’s better than last year’s gain and slightly above the 3.4 percent average since the Great Recession officially ended in 2009.
The economy expanded at just a tepid 1.1 percent annual pace in the first six months of the year. Still, economists have forecast that growth accelerated to a 2.5 percent to 3 percent annualized pace in the July-September quarter.
The slower growth hasn’t led employers to cut back on staffing. Applications for unemployment benefits, a proxy for layoffs, fell on average last month to a 43-year low.