Economy hobbled by slow job growth
BY MARTIN CRUTSINGER & CHRISTOPHER S. RUGABER Associated Press
Friday, September 21, 2012
9/21/12 at 4:38 AM
WASHINGTON - A trio of reports Thursday offered a reminder that the U.S. economy is struggling to grow and add jobs.
The number of people seeking unemployment benefits last week stayed near a level that signals only weak hiring in September. Manufacturing shrank for a fifth straight month in the Philadelphia region, a sign that weaker global growth has hurt demand for American-made goods. And a measure of future economy activity declined for the second time in three months.
The data followed a poor month of hiring in August and the Federal Reserve's move last week to launch new stimulus measures to give the hobbled recovery a jolt.
"There certainly doesn't appear to be much improvement in the performance of the economy," said Sam Bullard, senior economist at Wells Fargo Securities. "Manufacturing continues to soften and decelerate. We shouldn't expect to see substantial gains in hiring or output from manufacturers any time soon."
Thursday's reports showed:
- Weekly applications for unemployment benefits fell by only 3,000 last week to a seasonally adjusted 382,000, the Labor Department said. The four-week average, a less volatile measure, rose for the fifth straight week to 377,750. Applications, which are a proxy for layoffs, typically need to fall below 375,000 consistently to signal the job market is strong enough to lower unemployment.
- The Federal Reserve Bank of Philadelphia says its September index of regional manufacturing activity stayed below zero, which signals contraction in the market. While the index rose to -1.9, it has been negative since May. Nearly 23 percent of firms in the region reported declines in activity this month, only slight improvement from 30 percent of firms in August.
- The Conference Board said its index of leading indicators dipped 0.1 percent in August. The report noted that manufacturing orders, consumer confidence and average weekly manufacturing hours all slipped. The index is intended to anticipate economic conditions three to six months out.
Hiring has languished since winter, and the unemployment rate remains elevated at 8.1 percent.
U.S. manufacturing, which had helped pull the economy out of the Great Recession three years ago, has weakened since the spring. Factories have been hurt by a decline in consumer spending and slower global growth that has cut demand for U.S. exports.
Many companies are also worried that the economy could worsen if Congress fails to reach a budget deal before the end of the year to prevent taxes from rising and deep cuts in spending.
The housing market has been one of the few bright spots this year. Sales of previously occupied homes jumped in August to the highest level in two years, the National Association of Realtors said Wednesday.
Still, overall economic growth remains weak. The economy grew at a tepid 1.7 percent annual rate in the April-June quarter. The Fed said it expects growth will stay at or below 2 percent this year, but is slightly more hopeful about the next two years.
Original Print Headline: Economy lags on slow hiring
Associated Images:
Job applicant Monika Fogar (center) waits in line for an interview during a hiring fair for the renovated West Los Angeles Orchard Supply Hardware store last week. The U.S. economy is struggling to grow and add jobs, according to reports released Thursday. PATRICK FALLO/Bloomberg
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