Unemployment spike’s not so bad

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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.