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Monday, December 5, 2016

Washington (AFP) – The U.S. jobless rate fell to 7.2 percent in September from 7.3 percent the month before, but job creation remained sluggish, the Labor Department reported Tuesday.

The economy generated a less-than-expected 148,000 jobs during the last month, but revisions for July and August that added 9,000 net new positions to the data helped push the overall unemployment rate down.

Analysts said the data confirmed the economy’s slip into a weak spot in the third quarter, which was likely exacerbated by the 16-day government shutdown earlier this month.

They said it likely points to the Federal Reserve keeping its stimulus program in place for the rest of the year.

“We would be astonished now if the Fed were able to taper this year; even March looks like a struggle,” said Ian Shepherdson at Pantheon Macroeconomics.

The 148,000 net new jobs number was just barely above the average for the third quarter, and well below the 195,000 a month gain in the first half of the year.

The number of unemployed Americans fell by a slight 61,000 to 11.25 million, while the labor force participation rate, which had been signalling a rising number of dropouts from the workforce, held steady at a low 63.2 percent.

The private sector added only 126,000 net jobs, the gains strongest in transportation, construction, wholesale and retailing, and temporary help services.

For the second month in the row, government added a significant number of jobs, 22,000, mostly in the education sector.

The number of unemployed Americans fell by a slight 61,000 to 11.25 million, while the labor force participation rate, which had been signalling a rising number of dropouts from the workforce, held steady at a low 63.2 percent.

The slow hiring by the private sector could have been influenced by fears rising throughout September that the government would be shut down at the beginning of the 2014 fiscal year on October 1 because Congress would not agree on a budget.

Ultimately the shutdown did take place, idling hundreds of thousands of federal workers for two weeks, delaying the September data report by more than two weeks and taking an estimate $24 billion out of the economy.

Economists say that will result in the jobs and economic growth data for October and November not giving a complete picture of how the economy is doing and put on hold any action the Fed might have taken to begin tapering its $85 billion a month in bond purchases.

The slight fall in the jobless rate took it to the lowest level since December 2008, when the country plunged into deep recession.

It was down from 7.8 percent a year ago.

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