Payroll processor ADP said the economy added 162,000 jobs in September. That figure beat economic forecasts, which had predicted around 133,000 jobs being created. The number is down from August, when 189,000 jobs were created. The Labor Department will be releasing their employment numbers, including the unemployment rate, this Friday.
Stocks were up in morning trading on the job news. The major indexes were hovering over low gains in the early afternoon as oil and metals weighed on the market. The numbers show that the economy is still growing, but it is still growing slowly. One bright spot was housing. Over 10,000 new construction jobs were created in September, the most since March. This is just the latest sign that the housing sector may finally be coming to life.
There will be two more jobs reports before the election in November. Experts don’t expect major deviations from the current pattern. Job creation will probably be around 100,000, and the unemployment rate is likely to hover around 8%. Given these numbers, the reports are not likely to have a major impact on the presidential election.
The first presidential debate will be held tonight, and the economy is sure to be a hot topic. Republican challenger Mitt Romney will probably attack the president’s economic record, claiming he did not do enough to create jobs. President Obama is likely to counter with the fact that there have been 30 straight months of job creation, and that he inherited a deep recession. Whoever wins this argument will likely be the next president of the United States.
The economy is being challenged by factors that are beyond our control at the moment. Weakness in Europe and a slowdown in China could send our economy into recession next year. The looming fiscal cliff, a combination of spending cuts and tax increases, could lead to a contraction as well. The fiscal cliff is a situation we can control, and there should be some movement on that front in the lame duck session of congress after the election.
The economy is currently trapped in neutral, and government action will be needed to get it going. The Federal Reserve recently sprang to action with aggressive monetary stimulus, but that may not be enough to solve the problem. Once the election is over, we need congress to begin to do its job.