Oct 3, 2014 5:01 AM
US employers likely stepped up hiring in September
The Associated Press
WASHINGTON (AP) U.S. employers may have produced 200,000-plus job growth in September, a potentially reassuring sign after a hiring slowdown in August.
Economists have forecast that employers added 215,000 jobs last month, according to a survey by FactSet. That would match the average monthly gain this year, up from last year's average of 194,000. The unemployment rate is expected to remain 6.1 percent.
The Labor Department will issue the September jobs report at 8:30 a.m. Eastern time Friday.
In August, employers added just 142,000 jobs after topping 200,000 for six straight months, the longest such stretch since 1997. Even if the government reports that hiring was subpar for a second straight month, some economists say it wouldn't be cause for alarm. Most other recent data indicate that the economy is expanding at a healthy pace.
And September job figures have often been skewed by seasonal quirks, such as many students giving up summer jobs and teachers returning to work.
The figures will be studied by Federal Reserve policymakers, who are tracking the job market's various gauges to determine whether the economy is returning to full health. Strong hiring could raise pressure on the Fed to increase its benchmark short-term interest rate, which it's kept near zero for nearly six years to support the economy.
August's slowdown was attributed in part to temporary factors, such as a walkout by 25,000 workers at Market Basket, a Northeastern grocery store chain. That dispute has since been resolved, and the return of those workers could boost September's job total.
Auto manufacturing jobs had also fallen in August, even though car sales have been strong this year. That has led many economists to forecast a rebound in auto manufacturing jobs in September.
The growth of the economy has been healthy enough that most analysts predict that hiring will remain solid even if one or two months occasionally produce disappointments.
The annual pace of economic growth is expected to remain above 3 percent for the rest of the year. Business investment is picking up, and consumer spending is growing at a steady if modest pace.
Joseph LaVorgna, an economist at Deutsche Bank, notes that productivity the amount of output per hour of work is rising 1 percent annually. LaVorgna thinks the economy is expanding at a 3 percent annual pace and that hiring should grow roughly 2 percent a year. That would translate into 230,000 jobs each month, he calculates.
LaVorgna also notes that employee tax withholding receipts are growing at a brisk pace, suggesting that companies are stepping up hiring.
And just 287,000 people sought unemployment benefits last week, not far from a seven-year low reached in July. The number of people receiving benefits has reached an eight-year low, a sign that companies are confident enough in their customer demand to retain their staff levels.
Business investment in equipment and buildings rose 9.7 percent in the second quarter, the second-highest figure in the past three years. And orders for capital goods, a sign of future business spending, rose in August.
Americans have generally spent cautiously this year, held back by sluggish wage growth. Average hourly pay has barely kept up with inflation in the past three years.
But Americans spent more in August. When adjusted for inflation, spending that month rose at the fastest pace in six months.
Still, there are weak spots. Home sales slipped in August as investors cut back on their purchases, and higher prices have made homes less affordable, particularly for first-time buyers who face tighter credit standards.
Fewer Americans signed contracts to buy homes in August, the National Association of Realtors said this week. That suggests that home sales could slip again in coming months.