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Labor market softens
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October 2, 1998: 10:38 a.m. ET
U.S. payroll in September grew at weakest pace in nearly three years
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NEW YORK (CNNfn) - The unemployment rate climbed slightly in September while payroll grew at its weakest pace in nearly three years, the Labor Department reported Friday.
The unemployment rate rose to 4.6 percent from August's 4.5-percent level, as businesses created 69,000 jobs outside the farm sector, a sharp decline from the 309,000 jobs created in August. Last month's figures, however, were skewed as workers returned after the end of two General Motors Corp. (GM) strikes.
Economists had forecast an unemployment rate of 4.5 percent with 187,000 new jobs created. September's employment gain was the weakest rate since the nonfarm sector shed 48,000 jobs in January 1996.
The softer-than-expected report helped pull the bond market down after a moving at a blistering pace the previous two days. The benchmark 30-year Treasury bond was off 7/32 in price for a yield of 4.88 percent shortly before 10 a.m.
The manufacturing sector exhibited continuing weakness. Factories shed 16,000 jobs in September after a gain of 99,000 in August. The manufacturing sector has dropped 152,000 jobs since March.
In recent weeks, Federal Reserve Chairman Alan Greenspan and Labor Secretary Alexis Herman have expressed concern over a slowdown in the manufacturing sector.
The services industry slowed down as well, adding just 24,000 jobs in September, well below its monthly average of 112,000 through August.
Labor Secretary Alexis Herman told CNNfn that though the report still shows a strong U.S. economy, it does illustrate how the United States is not immune to global forces.
"This just points to the fact that we really are vulnerable to international developments," she said.
Herman declined to comment specifically on whether the Federal Reserve will regard September's soft labor figures as ammunition for an additional cut in interest rates, but added, "I support the actions (Fed Chairman Alan) Greenspan is taking. I believe that they will take this report into consideration."
The Labor Department reported average hourly earnings rose 1 cent to $12.86 in August. The average workweek retreated to 34.4 hours from 34.6 hours in August. 
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Labor Department
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