WASHINGTON (10/23/13)--The unemployment rate fell to 7.2% in September, as American businesses added 148,000 employees to their payrolls, according to the U.S. Labor Department.
But even the modest decrease from the August rate of 7.3% could be overstating economic well-being, with the statistic reflecting data collected before the start of the government shutdown and thereby not reflecting any distortions that could have been caused by the budget melee.
However, early indicators show that economic growth slowed in October due to effect of the furloughs, uncertainty and pessimism about the U.S. Congress' ability to strike a meaningful budget deal, with predictions about the cost of the shutdown to the U.S. economy ranging from $12 billion to $24 billion (Market News Oct 21).
For the week ending on Oct. 12, the Labor Department's four-week moving average of initial jobless benefits claims increased by 11,750 to 336,500 (Market News Oct. 18). The New York-based Economic Cycle Research Institute's annualized growth rate for the week ending Oct. 11 fell to a 13-month low of 2.8% (Market News Oct. 21).
The Bloomberg Consumer Comfort Index, a metric of consumer expectations, fell to a 23-month low for the period ending Oct 13., with the percentage of people predicting a worsening economy having increased most dramatically since the collapse of Lehman Bros.--an event that led to the worldwide financial crisis in the fall of 2008 (Market News Oct. 21).
Even before the shutdown, the U.S. economy showed signs of weakness. The labor force participation rate before August was at its lowest since 1978, and job growth in Sept. 2012 was greater than job growth last month by 37,000 (New York Times Oct. 22).