US hiring slows, jobless rate drops marginally, to 7.2%

Ahead of the recent 16-day government shutdown, hiring across the U.S. slowed, resulting in a disappointingly shallow dip in the overall unemployment rate to 7.2 percent, according to new job figures released Tuesday.

The 148,000 jobs added to the economy in September fell short of economists' predictions, and even as the job count for August was revised to show more positions created than previously reported, employment gains in July were the weakest since June 2012.

The less-than-stellar numbers are particularly worrying given the economic toll taken by the government shutdown, which both delayed the release of the newest numbers and also had a significant effect on the economy which will only be reflected in next month’s jobs report.

Economists estimate the government shutdown shaved as much as 0.6 percent off the fourth-quarter GDP, through reduced government output and damage to consumer and business confidence, and totaled as much as $24 billion in lost economic output.

Temporary layoffs of federal workers and government contractors probably will lower October's job gain. Many economists say they won't have a clear reading on hiring and unemployment until the November jobs report is issued in early December.

In response to the numbers, the Obama administration noted that the newest report continued 43 consecutive months of private sector job creation, but cautioned against being content with the status quo. 

"This underscores the continued importance of taking steps that speed the recovery and boost job creation, while avoiding self-inflicted wounds like a government shutdown and debt ceiling brinksmanship that have the opposite effect'" said Jason Furman, chairman of the Council of Economic Advisers.

The economy has added an average of 143,000 jobs a month from July through September, weaker than the 182,000 added from April through June.

Though unemployment remains high, it is near a five-year low and is down from 7.9 percent at the start of 2013. Tuesday’s numbers showed that it ticked down a tenth of a percentage point to 7.2 last month.

But any reduction in unemployment belies the fact that the percentage of Americans working or looking for work remains at a 35-year low, suggesting that many unemployed people have stopped looking altogether and are therefore not counted among the unemployed.

The drop in unemployment also did nothing to change 7.9 million people who are considered involuntary part-time workers, or those who would prefer full-time employment but were not able to find it. That number was unchanged from the previous month.

Despite the gloomy outlook, there was some cautious ground for optimism in the latest numbers. Several higher-paying industries added jobs at a healthy pace. Construction firms gained 20,000 positions, the government boosted payrolls by 22,000 and transportation and warehousing gained 23,400 jobs.

And average hourly pay ticked up 3 cents to $24.09. In the past year, hourly pay has increased 2.1 percent, ahead of the 1.5 percent inflation rate.

Meanwhile, the slowdown in job growth was a key reason the Federal Reserve decided in September to hold off on tapering its $85-billion-a-month stimulus program. Many economists think the lack of clear economic data will lead the Fed to put off any decision on the bond purchases until 2014.

Al Jazeera and wire services