Job creation shortfall highlights fragility of American labour market
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Wednesday 23 October 2013
American employers added 148,000 jobs over September, underscoring the still fragile state of the labour market as the Federal Reserve considers changes to its bond-buying programme.
Analysts had expected the non-farm payrolls report for the month, which was delayed because of the partial shutdown of the federal government, to show a gain of 180,000 jobs.
The US Labour Department had been scheduled to release the report, which also showed that the unemployment rate had dipped slightly to 7.2 per cent, on 4 October. But the shutdown forced its Bureau of Labour Statistics to pare back its staff temporarily from more than 2,400 people to just three.
The figures will be scrutinised closely by policymakers at the Fed, who last month decided against cutting the scope of the central bank’s bond-buying programme of $85bn (£53bn) a month amid uncertainty about the economic recovery.
Their task will be complicated further at this month’s meeting by the 16-day government shutdown as Republicans and Democrats argued over the budget, the debt ceiling and the President’s health reforms. According to Standard & Poor’s, the ratings agency, the impasse in Washington is likely to chop 0.6 per cent off US growth in the final three months of the year.
Although lawmakers have given themselves some time to find a longer-term fix before the issues come up for debate yet again, concerns remain that the US – and the world – may have to endure another round of costly political jousting early next year.
Against that backdrop, the Fed, which was expected to signal the beginning of the end of the era of cheap money before 2013 was out, is likely to keep its policies unchanged for now.
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