The U.S. unemployment rate has fallen to 7.2%, the lowest in five years since the end of the Great Recession. Yet, employers are showing a reluctance to add jobs with only 148,000 jobs added in September. The economy added an average of 195.000 jobs a month the first half of the year and began slowing during the summer.
The lowered unemployment rates can also be attributed to workers who started dropping out of the labor force frustrated by their inability to find a job. Younger workers are most affected as baby boomers that need money for retirement remain in the workforce. Many older workers were hit the hardest in the down economy and loss of equity in their homes.
The disappointing growth is likely to reinforce the hesitance of the Federal Reserve officials to begin a withdrawal of its monetary stimulus program. Fed policymakers are weighing a cutback in its $85-billion-a-month purchase of bonds, but officials have been waiting for stronger employment growth.
The problem still is that our economy is not adding enough jobs to keep up with the population growth and new job seekers entering the market. The creation of new jobs is too slow to absorb at a satisfactory rate for the 11.3 million still officially unemployed or the help the 8 million part-time workers who want more hours or full time work.
Job growth in September was highest in the retail trade, transportation and warehousing, and temporary-help industries where each category added more than 20,000 jobs. The construction sector added 20,000 jobs and its strongest gain since February. Manufacturing remained flat, and the once-booming leisure sector, which includes hotels and restaurants, lost 13,000 jobs over the month. Government payrolls rose by 22,000 in September.
The increase in temporary-help employment may indicate an increase of hiring. Another so-called leading indicator, the average hours worked in a week, showed no change in September at 34.5 hours. Average hourly earnings for all private employees rose a measly 3 cents from August, to $24.09 last month.
Five years after the end of the Great Recession, Illinois has the second highest unemployment rate in the nations. According to the latest seasonally unadjusted unemployment numbers for the U. S. Bureau of Labor, half of Illinois MSAs had unemployment rates higher than the State’s average of 9.2%. In fact, on average unemployment rates were 4%higher than they were in August, 2007 before the recession.
Look for the next monthly jobs report which will be a week late due to the government shut down. I am hopeful for a better report.