Job creation in the U.S. economy fell short of forecasts in September, turning up the heat on an already-key issue heading into Friday's presidential debate.
According to the Department of Labour, employment rose by 96,000 new jobs last month. The jobless rate held at 5.4 per cent.
Economists had been expecting to see the creation of about 150,000 new jobs, although individual forecasts were all over the map with some projecting declines of as much as 10,000 positions while others predict gains in excess of 200,000.
In Friday's report, the Department of Labour also revised August's non-farm payroll gain down to 128,000 from previous estimates of 144,000.
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The numbers come just hours before U.S. president George W. Bush and Democrat candidate John Kerry meet in the second of three scheduled presidential debates in St. Louis.
Two previous months of data were mixed, with each candidate offering a different interpretation of how the massive U.S. economy was holding up.
Mr. Bush has argued that the economy has strengthened significantly during his tenure, although Mr. Kerry has countered that job losses in previous years mean the current administration is still residing over a net decline in employment since taking office 2001.
Friday's report was the last broad snapshot of how the labour market is performing before Americans head to the polls on Nov. 2.
Most economists suggest that a strong U.S. economy can generate more than 200,000 new jobs in any given month.
“This is clearly not good news for Bush,” TD Securities chief strategist Marc Lévesque said, describing Friday's numbers as “unequivocally weak.”
“If I was George, I would not be happy right now.”
In the third quarter, Mr. Lévesque said, employment gains have now averaged about 103,000 jobs a month suggesting that “employers are extremely cautious in their hiring plans.”
At the same time, he noted, the weakness in recent non-farm payroll reports doesn't square off with other employment indicators — most notably the job-related aspects of the Institute for Supply Management's purchasing managers index — which suggest a stronger pace of hiring.
“It's inconsistent and I think it's unsustainable,” he said. “I think one thing that may be happening out there is that we may be gearing up for a pop like we saw in the spring where we saw a string of really weak job gains and then we got a couple months where we got 300,000 plus.”
Also key in Friday's report was the Labour Department's preliminary revision for the period stretching from March, 2003, to March, 2004.
For that period, payrolls are expected to be revised up by 236,000 jobs, although the department also noted that number is below the historical average over the last 10 years.
In a memo widely reported in the media this week, the White House Council of Economic Advisers had been expecting a revision closer to 288,000, although CEA head Gregory Mankiw has also said that figure was a guess.
In Friday's report, labour commissioner Kathleen Utgoff also said the government department wasn't able to put an exact figure on how the recent spate of hurricanes in the Southern United States affected the employment picture.
However, she noted, a review of sample data for September in the affected areas suggested “there was a negative impact.”
“We will know more about the local effects when the official state estimates are available in two weeks,” she said.
By sector, hiring was up by about 109,000 positions in the service industries, while the construction sector added a modest 4,000 positions. Manufacturing employment was down by about 18,000 jobs.
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