|Topic||Productivity and Growth|
|Key Words||Unemployment Rate, Employment Rate, Recession, Economic Growth|
The Labor Department has just reported that September job growth was at the lowest rate in over two years. Unemployment also increased slightly. September's unemployment rate was 4.6 percent, an increase of 0.1 percent from the August rate. The job creation and unemployment data provide further evidence that the global financial crisis is having an impact on the U.S. economy.
September's employment report followed other economic data supporting a view that the eight-year-old economic expansion was weakening. Exports were down, retail sales had slowed and business investment had fallen. The University of Michigan's index of consumer confidence also slipped from August to September. Additionally, the Labor Department reported that it had revised its estimate of employment growth in July and August. The July figure was stronger, and the August data weaker, than had been initially reported.
The fall in exports is reflected by the decline in factory payrolls. Manufacturing jobs lost so far this year total 114,000. Construction employment also contracted by 20,000 jobs in September - the first non-weather related decline of the year. Perhaps the most striking change was the sharp slowdown in service sector hiring. September's gain was 105,000, less than half of the 215,000 average monthly gain this year. Wage inflation also seems to be slowing. Hourly pay increased by 4 percent in September, compared with a 4.3 percent gain in the May inflation figure.
The U.S. economy is still very healthy. Unemployment is at the lowest levels in 25 years for many demographic groups. The percentage of Americans working is at a near-record 64.1 percent. Most people looking for jobs are still able to find them. What the data does show is that the risks of recession have increased.(Updated November 11, 1998)
1. What is a recession?
2. How is the unemployment rate defined?
3. How does unemployment vary over the business cycle?
|Source||Sylvia Nasar, "Job Growth Turned Slack in September", The New York Times, October 3, 1998.|
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