By Shobhana Chandra
By Shobhana Chandra
WASHINGTON - Payrolls climbed less than projected in September, indicating the U.S. economy had little momentum leading up to the federal government shutdown. The jobless rate fell to an almost four-year low
The addition of 148,000 workers followed a revised 193,000 rise in August that was larger than initially estimated, Labor Department figures showed Tuesday in Washington. The median forecast of 93 economists surveyed by Bloomberg called for a 180,000 advance. Unemployment fell to 7.2 percent, the lowest level since November 2008. The report, delayed by the 16-day shutdown that ended Oct. 17, was originally slated for Oct. 4.
Progress in the labor market depends on how quickly the world’s largest economy can bounce back from the loss of business and uncertainty caused by the fiscal impasse. The budget dispute weighed on fourth-quarter growth and will prompt Federal Reserve policy makers to wait until March before starting to trim stimulus, a Bloomberg survey showed last week.
“Hiring will remain modestly positive,” Jason Schenker, president of Prestige Economics LLC in Austin, Texas, said before the report. He was the top-ranked forecaster of payrolls in the past two years, according to data compiled by Bloomberg. “The unemployment rate will come down very gradually. The shutdown came at an inopportune time.”
Bloomberg survey estimates ranged from increases of 100,000 to 256,000. Revisions to prior reports added a total of 9,000 jobs to overall payrolls in the previous two months.
The unemployment rate, derived from a separate Labor Department survey of households rather than employers, was forecast to hold at 7.3 percent, according to the Bloomberg survey median.
The participation rate held at 63.2 percent, matching the lowest since August 1978.
The September payroll figure reflects the pay period that includes the 12th of the month, two weeks prior to the federal shutdown. Tuesday’s report doesn’t include any late responses from employers, indicating the figures will be subject to revision as is typical each month.
It will take some time to confirm or refute that the shutdown and political brinkmanship in Washington led to a sharp pullback in activity this month, so the data may be discounted, some economists said.
“Since the economy is potentially in flux and the data for October and November are subject to an unusual degree of distortion,” Fed policy makers are probably going to maintain stimulus for several more months, Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Conn., wrote in an Oct. 21 research note.
Private employment, which exclude government agencies, rose 126,000 after a revised gain of 161,000. They were also projected to rise by 180,000, the survey showed.
Full-time employment climbed by 691,000 in September while part-time hiring dropped by 594,000.
Employment climbed at temporary-help agencies, wholesalers, transportation and warehousing businesses, and retailers. State and local government hiring also picked up.