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 user 2003-10-03 at 12:01:00 pm Views: 57
  • #7558
    Unexpectedly Good News on Unemployment
    WASHINGTON (Oct. 3) – Employers added jobs in September for the first time in eight months, the Labor Department said Friday in a surprise twist for financial markets, which had been braced for more losses.
    The number of workers on U.S. payrolls outside the farm sector grew by 57,000 last month, the first time since January that jobs were created and sharply contrary to Wall Street economists’ forecasts for a 30,000-job loss.

    The gain was not big above to bring down the unemployment rate, which was unchanged at 6.1 percent in September, but analysts said it was encouraging after seven straight monthly declines in jobs.

    Labor also said it appears the economy lost about 145,000 more jobs in the year ended March 2003, in a preliminary estimate that will be part of benchmark revisions it issues next February. The department’s current figures show 397,000 jobs were scrubbed in that 12-month period.

    The dollar vaulted higher in the wake of jump in jobs, which implied U.S. economic performance was outpacing other major regions.

    Stocks were broadly higher in early trading, with the Dow Jones Industrial Average up more than 100 points on investor hopes a strengthening economy will mean fatter profits ahead.


    The pickup in September employment, coming in the face of recent data that painted a mixed picture of economic activity, was certain to be welcomed by Bush administration officials anxious for some signs of turnaround ahead of the presidential election next year.


    Democrats have been zeroing in on the drain in jobs and sharp escalation in budget deficits since President Bush took office in 2001.

    Analysts were heartened by the report, but cautioned the economy still has a great deal of slack to take up.

    “It’s not a strong number, but at least it’s an increase. It’s too early to conclude that the jobless recovery is now becoming a job recovery,” said economist Hugh Johnson of First Albany Corp. in Albany, New York.

    Separately, the Institute for Supply Management reported Friday its index of non-manufacturing activity — basically services — eased to 63.3 in September from 65.1 in August.

    That still represents a sixth straight month of expansion, since the index remained over 50, but its employment index component weakened to 49.1 from 51 in August, which indicates some service businesses began laying off employees.

    Millions of jobs have been shaved from payrolls in the past few years, but there were nonetheless a few promising signs in the September employment report.

    While 29,000 more manufacturing jobs were lost — the 38th straight month in which factory jobs were cut — it was the smallest monthly decline since 25,000 in July 2002.


    The Labor Department also revised its estimate for August job performance to show 41,000 jobs were lost instead of 93,000.

    “It’s a relief,” said economist John Silvia of Wachovia Securities in Charlotte, North Carolina.

    “It’s very important that finally the employment numbers are kicking in and suggesting we are getting moderate employment growth, certainly not of the size of a typical economic recovery, but we are getting job growth,” he added.

    The average workweek in September was unchanged at 33.7 hours, but in U.S. factories the workweek increased to 40.4 hours from 40.2. In another indication that factories might be growing busier, overtime hours were expanded to an average 4.2 a week from 4 in August.