A gain of only 142,000 new jobs in September on top of a soft reading of 136,000 in August provides more evidence that the US economy is experiencing a slowdown in job growth. While disappointing compared with expectations, this slower job growth is more in line with the mediocre GDP growth of recent years, and also suggests that the very low productivity growth during that time is not sustainable. Part of the weakness in the recent slowdown in job growth was a result of the drop in manufacturing employment which is clearly suffering from weak exports growth. Even if employment continues to grow at about 150,000 per month, the lack of any signs of a recovery in labor force growth suggests that the unemployment rate will continue to go down, perhaps going below 5 percent by the end of the year.
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