Jobless Rate Rose In September

The unemployment rate rose to 4.6 percent and job growth slumped to its lowest level in nearly three years in September as the global economic crisis spread and deepened.

The rate, up from 4.5 percent during the three previous months, was the highest in six months. It had hit a 28-year low of 4.3 percent in April and May.

Employers added only 69,000 jobs to their payrolls last month, down from 309,000 in August and the weakest figure since a blizzard in the Northeast forced businesses to cut payrolls in January 1996.

"The relatively weak September growth reflects an unusually small increase in services and job losses in manufacturing and construction," said Katharine G. Abraham, commissioner of the Bureau of Labor Statistics.

Manufacturers cut payrolls by 16,000 jobs in September, the fifth decline in six months. During the period, factory employment increased only in August, reflecting a rebound following the General Motors strikes. Over the past six months, the sector has lost 152,000 jobs.

Recession in Asia has hurt U.S. factories on two fronts: It has slashed sales in what was once one of their best export markets and, because of steep currency devaluations, forced them to compete against a flood of cheap imports pouring into the United States.

The biggest declines in September were recorded by makers of industrial machinery and electronic equipment.

"Together, these two trade-sensitive industries accounted for nearly 40 percent of total factory job loss since March," Abraham said.

Construction payrolls fell by 20,000 jobs, despite the fact the lowest interest rates in 30 years are supporting building. Much of the loss came in heavy construction.

Jobs in the computer industry, engineering and health care rose, but temporary help firms shed 44,000 positions. Retailers added 37,000 jobs, about average.

Overall, services added just 24,000 jobs, about a fifth of the average monthly gain recently, suggesting the impact of the global slump in the United States may be starting to show up outside manufacturing.

In another sign of softness, the average work week fell to 34.4 hours from 34.6 hours in August.

Average hourly earnings rose only 1 cent, to $12.86, but that followed a strong 6-cent gain the month before and wages are up 4 percent from a year earlier.

Federal Reserve policy-makers, who cut short-term interest rates by a quarter percentage point this week to support U.S. economic growth, had been hesitating to cut rates earlier because of concern that strong wage growth would spur increased consumer price inflation.

September's report could leave room for further rate cuts.

However, despite the deterioration, labor markets still are strong by historical standards. The number of first-time claims for unemployment benefits fell to a five-month low of 289,000 last week.

And Abraham noted that the number of people workinpart time, who would prefer to work full time, stood at 3.4 million in September, down by 563,000 over the past year.

The unemployment rate last month edged higher for men, from 3.7 percent to 3.8 percent; for blacks, from 9 percent to 9.2 percent; and for teen-agers, from 15 percent to 15.4 percent.

But it fell for women, from 4.1 percent to 4 percent; for Hispanics, from 7.5 percent to 7.4 percent; and for whites, from 4 percent to 3.9 percent.

By educational level, the September rate ranged from 6.9 percent for high-school dropouts to 4.1 percent for high-school graduates to 1.6 percent for college graduates.

Written by Dave Skidmore