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Monday, October 24, 2016

By Jason Lange

WASHINGTON (Reuters) — U.S. employers slammed the brakes on hiring over the last two months, raising new doubts the economy is strong enough for the Federal Reserve to raise interest rates by the end of this year.

Payrolls outside of farming rose by 142,000 last month and August figures were revised sharply lower to show only 136,000 jobs added that month, the Labor Department said on Friday.

That marked the smallest two-month gain in employment in over a year and could fuel fears that the China-led global economic slowdown is sapping America’s strength.

“You can’t throw lipstick on this pig of a report,” said Brian Jacobsen, a portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.

The weak job growth took Wall Street by surprise and U.S. stocks sold off while the dollar also weakened and yields for government bonds fell.

Bets on interest rate futures showed investors only saw a 30 percent chance of a Fed rate hike in December, down from just under 50 percent before the job report’s release.

“(With) a weak report here, in combination with some of the other weakness that we are seeing across the globe, the odds get dinged for December,” said Tom Porcelli, an economist at RBC Capital Markets.

Investors saw virtually no chance the Fed would end its near-zero interest rate policy at its only other scheduled meeting this year, to be held later in October. Futures prices indicated investors were betting the Fed would probably hike in March.

U.S. factories are feeling the global chill and shed 9,000 jobs in September after losing 18,000 in August, according to the Labor Department’s survey of employers.

“We saw events in China lead to some global financial turmoil and you’re seeing that in the data here,” White House chief economist Jason Furman told Reuters.

New orders received by U.S. factories fell 1.7 percent in August, the Commerce Department said in a separate report.

Paul Ryan, a top Republican lawmaker in the House of Representatives, said the weak turn in the economy should be a wake-up call for Washington to reform the national economy with new tax laws, free trade agreements and policies to get people off welfare.

“This recovery continues to disappoint, but we can’t accept it as the new normal,” Ryan said.

The recent pace of job growth should have been enough to push the unemployment rate lower because only around 100,000 new jobs are needed a month to keep up with population growth.

But the jobless rate held steady at 5.1 percent. The unemployment rate is derived from a separate survey of households that showed 350,000 workers dropping out of the labor force last month, as well as a lower level of employment.

The share of the population in the work force, which includes people who have jobs or are looking for one, fell to 62.4 percent, the lowest level since 1977.

Average hourly wages fell by a cent to $25.09 during the month and were up only 2.2 percent from the same month in 2014, holding around the same levels seen all year and pointing to marginal inflationary pressures.

The report did have a few bright spots that might be welcomed by Fed chief Janet Yellen, who said last week the economy was doing well enough to warrant higher rates this year.

The number of workers with part-time jobs but who want more hours fell by 447,000 in September to 6.0 million.

Yellen has signaled that the elevated number of these workers points to hidden slack in the labor market that isn’t captured by the jobless rate. A measure of joblessness that includes these workers and is closely followed by the Fed fell to 10 percent, its lowest level since May 2008.

Economists polled by Reuters had expected job growth of 203,000 in September.

All told, revised estimates meant 59,000 fewer jobs were created in July and August than previously believed.

In another grim sign, the number of hours worked in the country fell 0.2 percent, raising the specter that some broader softness might have gripped the economy last month.

Some of the strongest headwinds on the U.S. economy come from the commodity sector, which has slowed in part because of weaker demand from China.

The price of oil has fallen nearly 50 percent over the last year, and U.S. mining payrolls, which include energy sector jobs, fell by 10,000 in September, the ninth straight month of declines.

(Reporting by Jason Lange; Additional reporting by Rodrigo Campos and Karen Brettell in New York; Editing by Andrea Ricci)

Photo: People seek employment at a job fair for the homeless at the Los Angeles Mission in the Skid Row area of Los Angeles, California June 4, 2015. REUTERS/David McNew

  • joe schmo

    Thanks Obama for 7+ years of a disastrous egotistical reign, and we appreciate you, Obama, for not discussing the real numbers of unemployed who now number around 92,000,000. Thanks for the people who didn’t come in here legally. Thanks for the killers the drug cartel and the terrorists that now mar our vacant shores. Thanks for having the bias for being a total bigot against Americans and in allowing all these squatters to take the jobs Americans WANT to do.

    • drdroad

      If there are 92 million unemployed now, how many were there in the last year of the disastrous Bush Administration when we were losing 700,000 – 900,000 jobs MONTHLY instead of gaining jobs?

      • BillP

        You have to ignore this troll’s claims. Since he and other right wing trolls can’t talk about the unemployment rate of 5.1% they are claiming that the “Not in labor force” represents a “true” unemployment #. The Bureau of Labor Statistics publishes a monthly report that show the following:
        Civilian Non-institutional population (people 16 & over) – 251.325 million
        Civilian Labor Force (those employed) – 156.715 million
        Not in Labor Force – (CNIP – CLF) – 94.610 million. This is what Joe Schmuck is stating is the real number of unemployed, he is either being deceitful, ignorant or both. This “Not in labor force” # includes various age categories:
        75yo & over – 17.63 million
        70yo – 74yo – 9.291 million
        65yo – 69yo – 11.018 million
        60yo – 64yo – 8.709 million
        Total – 46.648 million vast majority of these are retired not unemployed as the troll would claim.
        The there are the lower age groups
        16yo – 17yo – 6.984 million – various # are in high school
        18yo – 19yo – 4.288 million – probably 1/2 are in high school or college
        20yo – 24yo – 6.642 million – probably 1/3 in college on some level
        Total – 17.914 million of which 11.342 million are in school.
        The 25yo – 54yo group is 24.038 million people in this group are the people who mostly likely would be working, a certain 3 of this group would be stay-at home parents. The 55yo – 59yo group is 6.118 million, a % of whom would be classified as retired
        Because this “Not in labor force” has increased Schmuck claims that this is an ignored issue. He fails to acknowledge that the oldest Baby Boomers is going to be 70yo next year and the youngest 52yo so more and more Baby Boomers are retiring thereby increasing the “Not in labor force” amount.

    • Independent1

      Do you ever rant about something that’s not total nonsense??

      What may be starting to happen at this point is that the economy is finally starting to falter because of all the monies the GOP has allowed corporations and the wealthy to suck out of it and then park in investment accounts overseas. For years now the GOP has passed legislation after legislation that basically shovels money into the pockets of big corporations and the upper 20% – especially the upper .1% of the wealthy. All the time draining monies from the pockets of those who actually drive our economy (the middleclass).

      How long do morons such as yourself think our economy can function at a pace that provides corporations and the wealthy with sufficient profits for their businesses when they are constantly draining monies from those who drive the economy????

      I’ve posted these charts numerous times. Showing this all started back with Reagan when he cut the max tax rate more than in 1/2 during his disastrous 8 years. and he not only cut taxes several times from 70% to 28% toward the end of his 2nd term; but he also raised them several times in ways that would impact the middleclass most of all – creating more income inequality. One of the charts shows this very clearly – the shift of income skyrockets to the upper 10% during the 1980s and the pie chart shows where that has gotten us as of 2010.

      And then there’s a pie chart that shows the enormous income inequality back in 2010 where the lower 80% own only about 5% of the nations incomes. And during 2011-13 while the economy was recovering from the Great Recession the income inequality got even worse than what is shown in the pie chart.

      And finally, there’s a chart which shows the number of times that money is changing hands today- from the time it’s printed and put into circulation until it disappears from circulation and most likely get’s dumped into some overseas investment account; the number of times it changes hands, or frequency, has plummeted since Reagan’s time again. Monies now only change hands about 4-5 times before they disappear from circulation (where it was changing hands 20 times or more back when Reagan took office) – showing just how few companies there are today providing the basic needs of people: the GOP has gimmicked America’s laws such over the years that companies have been allowed to willynilly buy up every competitor and thereby have destroyed the vast majority of Mom & Pop type companies in America. Such that now, all that’s left are giant players that grab and suck up each dollar spent by the poor and middleclass and remove it from circulation – leaving the peons (the lower 80%) with virtually nothing to use to keep our economy humming!!

      We could well be seeing the beginning of the time that’s I’ve been suggesting would be coming, when those uber wealthy bloodsucking morons start seeing diminishing profit returns because like you, they’ve been too stupid to see the handwriting on the wall!!!!!!!!!

      • Dominick Vila

        In addition to the fiscal nightmare you mentioned, Reagan
        also engaged in a massive military buildup that contributed to out of control budget deficits, the need to borrow, and the need to raise the national debt ceiling 18 times during his tenure.
        Something else the Gipper did to us involves the consequences of his demonization of government, which he labeled as being the problem rather than the solution, while engaging in government actions that undermined our economic prowess and our international credibility.
        If it wasn’t because he was a charismatic President, who had the ability to connect with mainstream Americans regardless of how obtuse his policies were, he would probably be regarded as one of our worst Presidents; not only because of what happened during his tenure, but because of the long term impact of his legacy.

        • Independent1

          Great post!! And although George Bush clearly created the greatest ‘visible’ and therefore identifiable disasters to America, I for one, have clearly believed that Ronald Reagan was by far the worst president America had and was an absolute ‘Pariah’. And I felt that way even when he was weaving his devious underhanded schemes like brainwashing Americans into believing in ‘trickle down economics’; and that unions are something to be hated along with the government and on and on.

          Ronald Reagan was without question the most deliberately devious and evil person who ever sat in the White House. He was so devious that even when he was an actor, he became a member of the Screen Actors Guild and then convinced the then members to make him president of the Guild until he started doing things to destroy the Guild which made them
          realize that all along he hated unions and they kicked him out.

          He proved his hate for unions by hoodwinking the Air Traffic Controllers Union people into believing he would negotiate with them on their grievances about getting better hours, they were working the controllers to death; but then he deliberately balked at following through with the negotiations and in a knee jerk reaction the controllers struck; which wasn’t legal for them to do and he summarily fired the entire unionized base of controllers in one fell swoop putting the American flying public at great risk.

          The ATC supervisors had to work trying to control air flights for months while they were trying to train replacements for the actual controllers. Which had to be a clear distraction and a heightened probability that an accident may occur. Reagan was just super fortunate no major air accident occurred. And following that, he appointed to men he knew hated unions to the National Labor Relations Board in a further effort of his to destroy unions in America.

          No! There’s not question in my mind that Ronald Reagan was clearly the worst president that America ever had – the destruction he’s created to just the fabric of the American people’s work and social lives is just simply un-measurable. And what’s even more galling to me, is that right-wing idiots thinks this Pariah is a Saint and keep bringing him up as some kind of shining example at their conventions. Nothing Reagan ever did should be an example to anyone.

    • Independent1

      And you can thank Reagan for having created an enormous block of ‘unemployable’ Americans. When Reagan taught CEOs and Entrepreneurs that it wasn’t their employees that were important (by intentionally destroying the Air Traffic Controllers Union), but rather it was their profit levels that really mattered( the bottom line); he began the creation on an enormous block of unemployable Americans – Americans between the ages probably of 45 and 65.

      As CEOs and Entrepreneurs took Reagan’s advice, they began by starting to ‘weed out’ employees that were in their minds making too much money and maybe creating too much long-term liabilities for their company. So starting a couple years after Reagan took office, companies started cutting even very loyal hard working employees, that had been with them for years, rewriting their jobs as an excuse to let them go, just so they could do two things: 1) hire younger people that they could pay less and thereby cut their payroll, and 2) keep some people from attaining pension levels that would add to their long-term liabilities.

      What this ended up doing, was creating a class of people in their mid to late forties or maybe early 50s, who were experienced but had higher than usual income needs because they had established families. This made it difficult for many these basically abandoned employees to find new jobs. And that problem has only gotten worse over the years as the pool of older abandoned workers has grown and over time, companies have even worked harder to keep their payrolls at barebones levels to ensure as much profitability as they can squeeze out of their businesses.

      So what you have today, is an enormous block of Americans who are essentially unemployable (because companies today are so pay conscious they’re not likely to hire a 55 year old who needs to make 2-3 times what a 25 year old would work for), who have been forced into finding other ways to survive. People who somehow make a living, maybe even living with family or taking in boarders or who knows, but the make a living and yet they do not show up in the BLS numbers of the people looking for jobs.

      They are simply not being accounted for, which is why there are so many supposed labor force experts that are out there scratching their heads wondering how the labor participation rate can appear so low when there aren’t another 8-10 million people living under bridges.

    • Independent1

      I have no clue where you RWNJs keep getting this 92 million unemployed. That number is purely bogus and an absolutely stupid number.

      Start with 315 million Americans minus 149 million actively working today according to BLS = 166 million not working.

      166 million not working, minus 82 million kids less than 19 still in school = 84 million – 18 million kids that are in college = 66 million.

      66 million Americans Over 19 and not in college who are not in the working # minus 45 million Americans over age 65 = 21 million possibly unemployed.

      21 million possibly unemployed mins 10 million Americans either 1) wealthy enough they don’t need to work; 2) they have a spouse who works so they don’t need to; 3) they’re not sufficiently educated to work and are on welfare, 4) they’re disabled in some way and are maybe on SSDI = 10 million possibly really unemployed.

      10 Million really possibly unemployed compared to what the BLS estimates as the unemployed which is 7,915,000 – means there may be 2 million or more of the ’employable’ Americans in their late 40s and 50s.

      • Dominick Vila

        Great post!

  • Otto Greif

    Obamanomics is working.

    • Independent1

      No. What may be happening is something that Reagan started. See my posts to Joe Schmo below.

  • Otto Greif

    Employers not hiring? But I heard we shouldn’t restrict immigration because there is a labor shortage.

    • Independent1

      Some excerpts form a Yahoo News article:

      Left and Right Agree: Immigrants Don’t Take American Jobs

      That immigrants take the jobs of American-born citizens is “something that virtually no learned person believes in,” Alex Nowrasteh, an immigration expert at the libertarian Cato Institute, said at a Thursday panel. “It’s sort of a silly thing.”

      Most economists don’t find immigrants driving down wages or jobs, the Brookings Institution’sMichael Greenstone and Adam Looney wrote in May. In fact, “on average, immigrant workers increase the opportunities and incomes of Americans,” they write. Foreign-born workers don’t affect the employment rate positively or negatively, according to a 2011 analysis from the conservative American Enterprise Institute. And a study released Wednesday by the liberal Center for American Progress suggests that granting legal status to undocumented workers might even create jobs.–politics.html

      • Dominick Vila

        I think that claim is more than just silly. The average American worker has the skills, and work ethics, necessary to aspire to something better than pick strawberries or lay down sod all day long for a miserly salary.
        What the right wingers should pay attention to are the conclusions reached by demographers regarding the distinct probability of Asians becoming the largest minority in the USA by mid century. The most glaring difference between Asian and Latino immigrants is that the former are not interested in menial jobs. Many are medical doctors, registered nurses, engineers, mathematicians, chemists, biologists, pharmacists, and other professionals whose goal is to get the jobs Americans should aspire for.
        In my opinion, insisting that semi-skilled workers are taking jobs away from Americans is either an insult to the American people, or an admission of social and educational failure.

        • Independent1

          I agree completely. You make some very good points.

  • Daniel Jones

    Of course there’s stumbling in job growth–employers are waiting for the awful results when the next crazy Pubbie takes Boehner’s place and promptly disgraces this country.

  • rothgar

    Only 278 thousand new jobs over the last 2 months is some stumble. Wow! Having gotten 1 of them after months of contract work I sure enough appreciate the stumble.

  • Dominick Vila

    It takes a lot of nerve for members of a party whose policies contributed to the worst recession since the Great Depression, and the loss of 800,000 jobs a month to complain about anemic job growth. Having said that, there is no doubt that China’s economic woes are taking its toll on the global economy, including ours. One of the most obvious consequences of China’s problems involve a dramatic reduction in imports, which has a direct impact on U.S. exports and related jobs. Needless to say, the uncertainty that China’s problems is having on consumer spending and investment is also contributing to lower than expected job growth. Concerns over the Fed raising interest rates, and Congress’ refusal to invest in infrastructure and alternative energies, are not helping either.

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