Saturday, October 05, 2002
Drop in unemployment a surprise
Fewer jobs paint mixed picture
The Associated Press
WASHINGTON - The nation's unemployment rate unexpectedly dropped to 5.6 percent in September, even as the economy lost jobs for the first time in five months, highlighting the difficulties some workers and businesses are confronting given the uneven economic recovery.
The latest snapshot of the country's employment situation, released by the Labor Department on Friday, offered a mixed picture of the jobs market and the national economy.
But economists said at least one clear theme emerged: The economy, after being knocked down by last year's recession, is back on its feet, but sure isn't bursting with vitality.
The economy continues to display significant divergence between parts that are doing well, such as parts of the service sector, and parts that are suffering - notably manufacturing, said Lynn Reaser, chief economist at Banc of America Capital Management. There's a big split in terms of winners and losers, she said.
September's 5.6 percent jobless rate - down from 5.7 percent in August - was the lowest unemployment rate in seven months. But a big part of the hiring benefited teenagers. The jobless rates for adult men and women held steady.
Business and government, meanwhile, reported that they cut 43,000 jobs in September, with job losses in manufacturing, transportation and retail swamping job gains in health care, finance and real-estate.
The unemployment rate and the payrolls data can move in different directions in a given month because they are based on two different statistical surveys. The jobless rate is based on a survey of 60,000 households in the United States. The payroll figures come from information supplied by roughly 300,000 businesses.
Economists weren't happy to see payrolls shrink by 43,000 in September, but revised data showing much stronger job gains in August took some of the sting out of September's job cuts. Friday's report showed that payrolls grew by 107,000 in August - almost three times more than the government previously estimated.
Also somewhat encouraging was the fact that the average number of hours worked in a week increased to 34.3 hours in September, up from 34.1 hours in August.
And, in another encouraging development, workers' hourly wages in September grew to $14.87 an hour, representing a 3 percent increase from the same month a year ago.
Consumers, whose spending accounts for two-thirds of all economic activity in the United States, have been the primary force behind economic growth this year.
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