Payrolls rise less than forecast; U.S. jobless rate falls

Payrolls climbed less than projected in September, indicating the U.S. economy had little momentum leading up to the federal government shutdown. The jobless rate fell to an almost five-year low.

The addition of 148,000 workers followed a revised 193,000 rise in August that was larger than initially estimated, Labor Department figures showed today in Washington. The median forecast of 93 economists surveyed by Bloomberg called for a 180,000 advance. Unemployment fell to 7.2%, the lowest level since November 2008. The report, delayed by the 16-day shutdown that ended Oct. 17, was originally slated for Oct. 4.

Progress in the labor market depends on how quickly the world’s largest economy can bounce back from the loss of business and confidence caused by the fiscal impasse. The budget dispute weighed on fourth-quarter growth and will prompt Federal Reserve policy makers to wait until March before starting to trim stimulus, a Bloomberg survey showed last week.

“It’s not like we’re falling off a cliff, but there’s a failure to get any spark in employment,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. “In the past three months, the pace of job creation has taken a step back.”

Stock-index futures climbed as the report fueled speculation the Fed will delay trimming monetary stimulus. The contract on the Standard & Poor’s 500 Index maturing in December rose 0.3% to 1,744.0 at 9:02 a.m. in New York.

Survey Estimates

Bloomberg survey estimates ranged from increases of 100,000 to 256,000. Revisions to prior reports added a total of 9,000 jobs to overall payrolls in the previous two months.

The unemployment rate, derived from a separate Labor Department survey of households rather than employers, was forecast to hold at 7.3%, according to the Bloomberg survey median.

The participation rate held at 63.2%, matching the lowest since August 1978.

The September payroll figure reflects the pay period that includes the 12th of the month, two weeks prior to the federal shutdown. Today’s report doesn’t include any late responses from employers, indicating the figures will be subject to revision as is typical each month.

It will take some time to confirm or refute that the shutdown and political brinkmanship in Washington led to a sharp pullback in activity this month, so the data may be discounted, some economists said.

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