U.S. Jobless Rate Holds Steady 121,000 New Jobs Created Last Month; Price Pressures Remain Under Control

The nation’s unemployment rate held steady at 5.6 percent in September as 121,000 new jobs were created, fresh evidence the economy is rebounding modestly from last spring’s slump.

“This signals a slow, gradual bounce back from the very weak conditions of the first half of the year,” said Daryl Delano of Cahners Economics, a Newton, Mass., forecasting service.

“The basic message is that the economy has rounded the corner and is back on the forward track,” agreed Robert G. Dederick, an economic consultant with the Northern Trust Co. in Chicago. “We have had our soft landing and we are now in a sedate recovery.”

The Labor Department said Friday the unemployment rate remained at 5.6 percent for a second straight month. After reaching 5.8 percent in April, the jobless rate has bounced between 5.6 percent and 5.7 percent for the last five months.

The report said that although job growth slowed from the 262,000 pace in August, every sector except manufacturing and government shared in the expansion.

The services industry added 106,000 jobs, retail payrolls grew by 48,000 and builders hired 16,000 new construction workers.

There was little sign of price pressures in the report. It said average hourly earnings increased by four cents to $11.52 in September after falling two cents a month earlier. That meant average hourly earnings have risen just 3 percent over the last year.

In a second report Friday, the Federal Reserve said consumer credit, which showed signs of slowing in July, regained momentum in August despite a drop in automobile loans.

The Fed said overall borrowing rose $9.1 billion in August, an 11.4 percent annual rate of increase, compared to $8.8 billion in July.

Factories lost 32,000 more jobs in September, boosting losses to 200,000 since last March. But analysts noted that orders have picked up recently, which should pare inventories and spur production and employment.

Government employment dropped by 30,000 after surging by 71,000 in August. The Labor Department said the figures reflected the increasing trend for schools to open in August rather than September.