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U.S. Job Growth Exceeds Estimates But Unemployment Rate Remains Elevated

U.S. Job Growth Exceeds Estimates But Unemployment Rate Remains Elevated
10/7/2011 9:13 AM ET

Boosted in part by the end of a Verizon (VZ) strike, the U.S. economy added more jobs than expected in the month of September, according to figures released Friday by the Labor Department, although the unemployment rate remained unchanged.

Total non-farm payroll employment increased by 103,000 jobs in September, as the addition of 137,000 private sector jobs more than offset the loss of 34,000 government jobs. The overall job creation figure far exceeds the 65,000 predicted by economists.

The job creation figure was somewhat inflated by the return to payrolls of roughly 45,000 telecommunications workers who had been on strike against Verizon in August.

At the same time, revised figures show that the economy added 57,000 jobs in August rather than the zero initially reported. July figures were also upwardly revised from an increase of 85,000 jobs to a greater gain of 127,000 jobs.

Despite the stronger than expected job growth, the unemployment rate remained at 9.1 percent in September, unchanged from the previous month.

According to Labor Department figures, the unemployment rate has remained stubbornly high, sticking within the narrow range of 9 percent to 9.2 percent since April.

Peter Boockvar, equity strategist at Miller Tabak, said, "Bottom line, 119k jobs per month have been created in 2011 on average, well below the 150-200k jobs that is needed to firmly lower the unemployment rate and eat into all the jobs lost in this recession."

"But certainly for today, the better number eased major concerns about where this economy is headed, at least for now," he added.

The report also showed that the number of people out of work for 27 or more weeks, known as long-term unemployed, was 6.2 million in September, accounting for 44.6 percent of the unemployed.

Furthermore, the number of people working part time who would prefer full time work rose to 9.3 million in September. A full 1 million Americans are counted as discouraged workers, those not currently looking for work because they believe no work is available.

Of the private sector job gains, the professional business services, health care, construction and information sectors added jobs, while manufacturing and retail jobs showed slight declines.

Average hourly earnings increased 0.2 percent in September, matching economists' expectations, while the average workweek ticked up slightly to 34.3 hours, an increase of 0.1 hours.

by RTT Staff Writer

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