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Job Numbers Trend Lower in September

On Friday, October 6 the United States Department of Labor released its jobs report showing an increase of only 51,000 jobs for the month of September, well under general expectations. Figures for previous months were revised upwards, however, and earnings were also moved higher squelching hopes that the coming year would bring cuts in interest rates.

Unemployment figures dropped to 4.6 percent, down from 4.7 percent in August. The September job increase, however, was the smallest gain exhibited since October 2005 when numbers indicated 37,000 new jobs created in the wake of the disastrous hurricane season on the Gulf Coast.

The numbers from August were revised to 188,000 over the original computation of 128,00 and July was moved from 121,000 to 123,000. At the same time, the department said jobs reported through March had been undercounted by 810,000.

The revisions are the largest made since the department began making its job report in 1991 and would seem to indicate that status of employment in the U.S. is better than originally thought.

Richard DeKaser, Nation City Corp.'s chief economist, said, "The slowdown hypothesis is still very much with us, but not as much as previously seemed to be the case. My view is that the Fed is going to continue to be biased in the direction of inflation concerns. We have more evidence that the Fed is unlikely to do anything any time soon."

In August the Fed stopped a rate-hike campaign that had spanned the previous two years. Financial markets were beginning to price in rate cuts for the coming year due to economic indicators such as the apparently weakening housing market. In recent weeks, however, officials from the Fed, speaking at various venues, have clearly indicated their focus will be on stopping inflation rather than a preoccupation with signs of slower growth.
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