Economy adds 103,000 jobs, but it's not enough

WASHINGTON

The jobs crisis isn't getting worse. But it isn't getting much better, either.

The economy added just enough jobs last month to ease fears of a new recession. But hiring is still too weak to bring down unemployment, which has been stuck around 9 percent for more than two years.

The nation added 103,000 jobs in September, an improvement from the month before, the Labor Department said Friday. But the total includes 45,000 Verizon workers who were rehired after going on strike and were counted as job gains.

Even setting aside that technicality, the job gains weren't enough to get the economy out of its soft patch. It takes about 125,000 jobs a month just to keep up with population growth. For September, the unemployment rate stayed stuck at 9.1 percent.

"Well, the sky is not falling just yet," Joel Naroff, chief economist at Naroff Economic Advisors, said in a note to clients. But there was nothing great about the report, he added. "It's incredible how low our sights have been set."

On one hand, the unemployment report was encouraging for economists. Some of them had feared the nation would lose jobs in September, raising the risk of a painful second recession.

But everyday Americans can't take much solace from it, either. The Great Recession has been over for almost two and a half years, and while corporate profits and the stock market have bounced back in that time, unemployment is still high.

There are 14 million people counted as unemployed in the United States. An additional 9.3 million are working part time and would rather work full time. And 2.5 million more have simply given up looking for a job.

The Labor Department said the economy added more jobs than first estimated in July and August. The government's first reading had said the economy added zero jobs in August.

While the report was clearly better than feared, it also showed the economy is not gaining much momentum, said Tom Porcelli, chief U.S. economist at RBC Capital Markets.

"It moves you away from the ledge," he said.

It was also discouraging news for President Barack Obama, who will almost certainly have to wage his 2012 campaign under the highest unemployment of any president running for re-election since World War II.

Gene Sperling, a White House economic adviser, said the administration was "slightly comforted" that the jobs figure came in better than expected. But he said it was not good enough.

Obama, adopting a combative tone as he waits for the Republicans to settle on a nominee to oppose him, has challenged Congress to get behind his $447 billion jobs bill or risk being run out of Washington.

The Obama plan aims to jolt the economy but cutting taxes and increasing spending on schools, roads and other public projects. He has proposed paying for it in part by raising taxes on the wealthy and corporations.

Obama's Republican rivals are trying to persuade voters that he is to blame for high unemployment and the sluggish economy. Former Massachusetts Gov. Mitt Romney told Fox News Channel on Friday that Obama is criticizing Congress simply because he is "looking for someone to blame."

The report sent the stock market higher. The Dow Jones industrial average was up about 90 points, slightly less than 1 percent, at midday. In the bond market, yields rose, another sign that investors welcomed the news.

There were some signs that business activity is increasing. The temporary help industry added almost 20,000 jobs, and the length of the average workweek increased slightly. Wages also rose a bit.

More hiring and better pay could add up to more consumer spending. That accounts for 70 percent of the economy. When people spend more money, it generates demand for businesses, which hire more workers.

The private sector added 137,000 jobs, up from August but below July's revised total. The economy lost 34,000 government jobs. Local governments in particular cut teachers and other school employees.

Among the industries that added jobs in September were construction, retail, temporary help services and health care. Manufacturing cut jobs for a second straight month.

The economy returned in September to something closer to the job growth of earlier this year. In February, March and April, the nation added an average of more than 200,000 jobs a month.

But then manufacturing slowed, consumer confidence crashed, and Washington was caught in gridlock -- first over whether to raise the nation's borrowing limit and then on how best to get the economy going.

Meanwhile, hiring slowed dramatically. The economy added only 53,000 jobs in May and 20,000 in June. The figures out Friday showed hiring improved in July, slowed slightly in August, and improved again in September.

Still, Federal Reserve Chairman Ben Bernanke warned Congress earlier this week that the economic recovery was "close to faltering," with slow job growth dragging down consumer confidence.

Bernanke, speaking in unusually blunt terms, said he could not blame Americans for being frustrated at the financial industry "for getting us into this mess" and at Washington for not coming up with a strong response.

August's figures were revised higher to show a gain of 57,000 jobs, up from the previous estimate of zero. July was revised to 127,000 jobs, from 85,000.

Americans wonder where the misery will end

(Reuters) - America is on the fritz.

From Times Square to St. Petersburg, Florida, and Portland, Oregon, people are trying to understand how the downgrading of America's AAA credit rating by Standard and Poor's agency caused a stock market crash and torpedoed their economic prospects so badly again.

Out of work, unable to sell their homes and with bills piling up, many wonder how they will make ends meet.

"My fridge is on the fritz, my washing machine is on the fritz, my oven is on the fritz, my roof is on the fritz," said Maria Thuy of Jenkintown a suburb of Philadelphia, who lost her job as a director of a non-profit a few weeks ago and wonders how she will stop her house falling down around her.

Like many, Thuy looked on in horror as the stock market crashed on Monday and she fears for her retirement savings.

Barbara Barak, 32, has a job selling cosmetics in an Orlando, Florida mall. But working largely on commission and with business "nonexistent," she may resign.

"People are afraid to spend money," she said.

Since her husband lost his steel industry job at the start of the 2008 recession and took a job with an ice cream maker, their annual income has fallen by $50,000. She could care less about the stock market because she has no savings.

Her financial plan? "Just survive."

On Monday, panicked selling resulted in the S&P 500's worst day since December 2008, down more than 6 percent with every stock in the benchmark index ending in negative territory.

PSYCHOLOGICAL IMPACT

Concern that Washington can't control rising debts or create enough jobs to spur growth contributed to the crash as did the loss of America's pristine AAA credit rating. Rising fears about Europe's debt woes made matters worse.

The S&P 500 is down 17.9 percent from its late April peak.

Consumer spending makes up about 70 percent of the U.S. economy and economists fear steep stock declines will have a psychological impact on households, causing them to cut spending, and force businesses to defer hiring and spending.

Miami store clerk Antonio del Valle said he blamed former President George W. Bush for the current woes. "If he hadn't wasted all that money on the wars in Iraq and Afghanistan, we wouldn't be discussing the debt ceiling," he said.

A decade of war in Afghanistan and eight years in Iraq have hurt the national budget and the 2008 financial crisis, with its resulting bailouts to stop a global financial collapse, led to less aid flowing from Washington to U.S. states.

As a result, working Americans were squeezed as U.S. states and municipalities hiked charges on everything from water to property taxes. Meanwhile, with inflation low and unemployment high, employers cut jobs, kept pay raises to a minimum and passed on soaring health insurance costs to employees.

Sammy Rubin, a 64-year-old electrical contractor in Birmingham, Alabama, blames politicians. A self-described conservative, he said he was angry at recent political fighting over the debt ceiling.

"If I had the power, I would freeze every congressman's bank account ... and make them go get a job, to see what it's like out here. And I wouldn't care if the whole government shut down, except for the military," he said.

The debt debate in Congress has strengthened the case of those who think the two-party system is failing. According to a CNN poll last week, 77 percent of Americans say that elected officials in Washington have behaved "like spoiled children" in the tug-of-war over raising the debt ceiling.

Josh Greenwood, a 24-year-old, who moved from California to New York and is working as a bartender, urged President Barack Obama to end partisan fighting in Washington.

"Obama needs to use his power and influence to get everyone on the same page," he said.

Susan Knight-Allen, a 55 year-old medical social worker, was getting her hair cut at a salon in the Hollywood neighborhood of Portland, Oregon.

"Maybe this time it is not going to correct," she said of the stock market. She and her partner put their money into cash two years ago and now she wonders if she can help, perhaps by getting some backyard work done.

"We have the money and somebody could probably really use that job," she said.

"HANGING ON"

Rachelle Markley, 48, worked at her nearby store Second Glance Books. The second-hand book store is cozy but, she says, "I am hanging on by the skin of my teeth."

As well as a weak economy, her business is suffering as sales shift to e-books. After an employee left in January, she left the job unfilled, leaving her overworked and alone.

Antoine Sykes, a 37-year-old security officer and doorman on Chicago's west side said he fears for his financial security and plans to save what he can, but doesn't trust the banks. "I'm leaving it under my bed or in my grandmother's closet."

Matthew Tavares, 43, and his wife Julia, 31, want to sell their home in the beach community of Marshfield, south of Boston. On the market for a year already, they worry they will have to drop the price more to sell it and will have to use their savings to cover their eventual losses.

The country's latest financial woes have also compounded the concerns of 51-year-old Harry Crown, a commercial painter in St. Petersburg, Florida. He says he lives paycheck to paycheck and expects to get laid off soon due to lack of work.

"It's scary," said Crown, nursing a pitcher of Miller beer at a bar. "You can't get ahead. You live to survive."

Another customer, 65-year-old Roger Dyke agreed. "The country's in a mess," he said. "I don't know any way of fixing it."