Help us end the fiscal year strong. Donate by June 30. Give Now

Unemployment spike’s not so bad

Amy Scott Oct 5, 2007

TEXT OF STORY

Scott Jagow: The Labor Department just reported that the unemployment rate ticked up last month to 4.7 percent. That’s the highest rate in more than a year. So then why are economists cheering this report? Amy Scott has the answer.


Amy Scott: Employers actually added more than 100,000 jobs last month. And it turns out in August, they added almost 90,000 jobs.

The Labor Department had previously reported a decline in August. The job gains weren’t enough to keep the unemployment rate from ticking up.

But economist Mark Vitner with Wachovia says 4.7 percent unemployment is still pretty low.

Mark Vitner: Businesses are out there competing to find workers, and wage increases are still at a pretty heft pace. And that’s both good and bad. I mean, it’s bad from an inflation perspective, but it’s good in that income growth should remain pretty solid. And that should keep the economy out of any serious trouble.

Troubles in the housing and credit markets took a toll on some industries. Construction companies cut 14,000 jobs. Financial services firms lost another 14,000. But gains in areas like education, services and government more than made up for those losses.

Analysts say the Fed is now less likely to cut interest rates later this month.

In New York, I’m Amy Scott for Marketplace.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.