Economy to Affect Elections

By Reuters  |  Print this article Print

The U.S. economy shed 95,000 jobs in September during a month when analysts had expected overall payrolls would remain unchanged. The bleaker than expected news points to a slower recovery.

The employment report is last before the November 2 mid-term elections in which President Barack Obama's Democratic Party is expected to suffer large losses amid voter dissatisfaction with the economy.

Opinion polls suggest Republicans will take control of the U.S. House of Representatives, which may give them a platform to pursue their agenda of restricting government spending to reduce a record budget deficit.

The recovery from the longest and deepest downturn since the 1930s has been slow to generate jobs.

Private hiring last month was held back by the goods-producing industries, where payrolls contracted 22,000 as manufacturing employment fell 6,000 after declining 28,000 in August. Construction payrolls fell 21,000, reflecting the lasting troubles in the housing market, after August's boost from the return of striking workers.

Private services sector employment rose 86,000 after increasing 83,000 in August. Temporary help services -- seen as a harbinger of permanent hiring - increased 16,900 last month after rising 17,700 in August.

"Job growth in the goods producing industries has been bottoming out. What we need to see, to get a really positive feed back loop in the economy, is the services sector start to edge up," said Troy Davig, senior U.S. economist at Barclays Capital in New York.

The end of temporary census jobs and the loss of 76,000 local government jobs pushed total government payrolls down 159,000 last month.

The length of the average workweek was unchanged at 34.2 hours for a third straight month. (Reporting by Lucia Mutikani; Editing by Neil Stempleman)