More weak growth expected in looming jobs report

In this Oct. 4, 2011 photo, Snotti St. Cyr, center, looks over a brochure while attending a job fair at a Goodwill store in Atlanta. AP Photo/David Goldman

WASHINGTON - The U.S. economy will likely show its fifth straight month of slight or no job creation when the government issues its September employment report Friday. Another weak month would underscore the sluggishness of the economy and the risk of another recession.

Economists forecast that employers added just 56,000 net jobs in September. That isn't enough even to keep pace with population growth or lower the unemployment rate. The rate is expected to remain at 9.1 percent for a third straight month, according to a survey of economists by FactSet.

The faltering economy has led many employers to reduce hiring. The economy grew at an annual rate of just 0.9 percent in the first six months of the year. Since then, Europe's debt crisis and stock market declines have heightened fears that the economy will struggle to grow enough to avoid a recession.

Jobs a dim memory for long-term unemployed
Obama to Congress: Pass my jobs bill - or explain yourself

In the first four months of this year, employers added an average of 180,000 jobs a month. But in the four months since, job gains have averaged just 40,000. In August, employers didn't add any jobs — the worst showing since September 2010.

The economy must create at least 125,000 net jobs a month to keep up with a growing population. At least twice as many are needed to rapidly shrink the unemployment rate. Unemployment has topped 8 percent for the past 31 months. It's the longest such stretch on record.

The economy desperately needs more hiring to boost the overall incomes of Americans, who would likely then spend more. Consumer spending accounts for 70 percent of the economy.

Obama: "Occupy Wall Street" reflects "broad-based frustration"
Can "Occupy Wall Street" become a movement?

It would require robust job growth to put the many long-term unemployed Americans back to work. Nearly 4.5 million people have been unemployed for more than year. That's equal to about one-third of the total unemployed — a record.

The job total for September should receive a boost from the return of about 45,000 Verizon workers who ended a three-week strike in late August. Their absence reduced the August job totals by 45,000, and their return should bolster the September number by a similar amount.

Slower hiring has put pressure on President Barack Obama little more than a year before the 2012 election.

On Thursday, Mr. Obama urged Congress to embrace his job-creation proposal, which he called an insurance plan against a return to recession. Mr. Obama said that without his nearly $450 billion package of tax cuts and public works spending, hiring and growth will be weaker. He said the bill could help prevent another downturn if Europe's debt crisis worsens.

Republicans have resisted Mr. Obama's plan, saying they oppose the higher taxes that he and other Democrats would use to pay for it.

Mr. Obama has increasingly cast himself in opposition to Congress, daring Republicans to vote against his package.

"Any senator who is thinking about voting against this jobs bill when it comes up for a vote," he said, "needs to explain why they would oppose something that we know would improve our economic situation at such an urgent time for our families and for our businesses."

Republicans have criticized the president's tactics as more of a campaign tool than a genuine attempt to seek compromise on job creation, with House Speaker John Boehner saying Mr. Obama had "given up on the country" and "decided to campaign full time instead of doing what the American people sent us all here to do and have to find common ground the deal with the big challenges that face our economy and our country."

Asked by CBS News' Bill Plante if his push for the bill is really about campaigning, Mr. Obama says he is "ready and willing" to negotiate with Republicans, but that they haven't shown serious interest in doing so

Adding to the national debate over the sluggish economy is the "Occupy Wall Street" movement that has seen thousands of Americans in New York City and around the country hit the streets to protest economic inequality and perceived corporate greed.

The demonstrations, which have been ongoing for more than two weeks, have not gone unnoticed in Washington or on the Republican presidential campaign trail.

On Thursday, Mr. Obama said the protests demonstrated "broad-based frustration about how our financial system works" while pledging to continue his efforts to create meaningful consumer protections.

Some GOP presidential contenders have taken a very different tact toward the movement, with Mitt Romney calling it "class warfare" and Herman Cain saying that "if you don't have a job and you are not rich, blame yourself," instead of Wall Street.

Meanwhile, the economy has sent mixed signals this week about the job market. But most signs point to only slight hiring.

On Thursday, the government said more people sought unemployment benefits last week, evidence that layoffs remain elevated. Weekly applications rose to a seasonally adjusted 401,000. Applications would need to fall consistently below 375,000 to signal sustainable job growth.

Still, the increase followed a sharp decline the previous week, and applications have trended lower in the past month. In addition, factories hired more workers in September, according to the Institute for Supply Management, a group of purchasing managers.

But a more troubling note came from the ISM in a separate survey released Wednesday. It said service companies cut staff in September. Consumers have been holding back on spending, reducing business for service providers such as restaurants, hotels, retailers and financial service firms.

On Tuesday, Federal Reserve Chairman Ben Bernanke warned that the economic recovery "is close to faltering." Bernanke said that the economy is growing more slowly than the Fed had expected and that the biggest factor depressing consumer confidence is poor job growth.

Comments