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US Economy Continues to Grow With More Jobs Created in September


Closely watched employment data released Friday by the U.S. Department of Labor reveals that more than 100 thousand jobs were created in September. VOA's Barry Wood reports that the agency delivered additional good news when it revised an earlier report for August reflecting an increase, versus a decrease, in employment.

The upbeat jobs report allayed fears that the U.S. economy is slowing significantly and headed for recession.

But the Labor Department reported that manufacturing and construction sectors lost 32,000 jobs collectively.

Market analyst Peter Morici, at the University of Maryland, expressed caution.

"It [the data] indicates that growth is slowing, but that we're not headed into a recession," he said. "However, it does indicate that growth is slowing and there is still a significant risk of recession. Let me point out that the goods producing sector-construction and manufacturing-continues to contract and contract a lot."

The recent job gains were seen in healthcare and education. The Labor Department also revised an earlier report.

Last month, the agency said that employment fell in August, the first drop in years. The drop caused concern, because it implied that the U.S. economy might be slowing more rapidly than anyone had previously thought. The news was also one of the reasons the dollar became even weaker.

But the Labor Department says they got the data wrong, and that employment actually went up in August. With job numbers improving in September, that means the U.S. economy is doing much better than people had thought.

Stuart Freeman, an analyst at AG Edwards brokerage in St. Louis, says even with the strong jobs report he believes the Federal Reserve, the U.S. central bank, will continue to cut interest rates to stimulate a slowing economy.

"We will see more slowing in the economy, slowing in the consumer part of the economy," he said. "I think the world economy will show more slowing. And I think we'll see a 50 basis point to 75 basis point decline [in the fed funds short-term interest rate] from the Fed, or a cut in general from the Fed between now and the end of the year."

The Federal Reserve will take the job numbers into account as it decides whether to continue interest rate cuts. The central bank has been moving to stimulate the economy with rate cuts, but it doesn't want to over-stimulate and spur inflation.

Financial markets responded positively to Friday's job report.

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