Job Growth Slows In September

Employers added just 51,000 jobs in September, the fewest in almost a year, while the unemployment rate dropped down to 4.6 percent — offering a mixed picture of the nation's jobs climate.

Still, the new figures released by the Labor Department on Friday provided fresh evidence that the economy has moved into a slower phase of growth.

"People are getting a little bit nervous that this job market is slowing down a bit more than expected," David Wyss, chief economist at Standard & Poor's, told CBS Radio News.

The new tally of payroll jobs added to the economy fell short of the 120,000 positions analysts were expecting. However, job gains for both July and August turned out to be bigger than previously estimated, helping to take some of the sting out of September's tepid payroll figure.

The 51,000 jobs added in September were the fewest since October, when the economy was still reeling from the blows of the Gulf Coast hurricanes.

"These numbers are still showing the economy suffering from the high oil prices that we had over the summer," Wyss said.

The nation's unemployment rate dropped a notch from 4.7 percent in August to 4.6 percent, matching the rate seen in June.

Friday's snapshot is the next to the last one that Americans will get of the labor market before Election Day.

The last one will come on Nov. 3 — just days before the November elections.

Voters' choices at the polls on Nov. 7 are likely to be shaped in part by how they are faring economically. The administration says Americans are mostly better off, while Democratic rivals disagree.

President Bush's approval rating on the economy is at 40 percent among all adults surveyed in an AP-Ipsos poll. That remains near his lowest ratings. The poll showed that people surveyed trusted Democrats to do a better job of handling the economy than Republicans.

The payrolls figure and the unemployment rate come from two different statistical surveys, which can provide — as in Friday's case — a somewhat mixed picture of what is happening in the labor market.

The seasonally adjusted overall civilian unemployment rate — 4.6 percent in September — is based on a survey of 60,000 households. It showed that 271,000 people said they found employment last month, outpacing the number of people who couldn't find work.

Economists tend to put more stock, however, in the much broader business survey of 400,000 work sites that is used to calculate the payroll figures.

On the payrolls front, job cuts at factories, retailers and government tempered job gains in construction, education and health services, and elsewhere.

"One of the big problems is the continued decline in manufacturing, and the other one that has popped up this year is the decline in retail trade. Retailers just aren't hiring people any more," said Wyss.

In August employers added 188,000 jobs, a stronger figure than the 128,000 reported last month. In July 123,000 positions were added, up slightly from a previous estimate of 121,000.

Workers' average hourly earnings rose to $16.84 in September, a 0.2 percent increase from August. Economists were forecasting a 0.3 percent gain. Economists keep close tabs on wage growth for clues about inflation.

"The economy is cooling off faster than the Federal Reserve or economists anticipated. Perhaps they've overdone it once again and raised rates too high," said Wyss.

The Federal Reserve's next meeting is scheduled for Oct. 24-25. Many economists believe the policymakers will leave rates unchanged for the third meeting in a row.

With the economy losing speed, the central bank in August decided to halt — for the first time — a two-year campaign rate-raising campaign. The Fed's goal is to slow the economy sufficiently to thwart inflation but not so much as to push it into recession.

Policymakers suggested the cooling economy eventually would lessen inflation pressures.

Energy prices now seem to be cooperating with this scenario. Gasoline prices, which had topped $3 a gallon in summer, have slid and now average $2.31 a gallon.

The economy grew at a 2.6 percent pace in the spring — less than half the pace of the first three months of the year. Growth in the July-to-September period could come about the same or even less — at around a 1 percent pace, according to various projections.