The Labor Department will release it September jobs report bright and early Friday morning, and as usual I'll be on the dawn patrol to consider the numbers. Last month's payroll report was disappointing; the economy added only 96,000 new jobs in August.
September could be better. The ADP report that comes out ahead of the official U.S. government release said the economy added 162,000 new jobs in the month. But a consensus from economists surveyed by Bloomberg expects only 113,000.
With growth as weak as it is in the U.S., another sub-200,000 Labor Department report shouldn't be surprising. If we want to add 200,000 jobs per month — the pace at the beginning of the year — we need GDP growth of 2 percent. In the second quarter of this year, however, we only saw GDP growth at 1.3 percent. That's just not good enough to enable this sluggish recovery to pick up speed.
Furthermore, if we want to move the unemployment rate lower faster, we need to add 300-400,000 jobs a month. And we're obviously nowhere near that pace now.
So it's likely that the U.S. unemployment rate will remain at 8.1 percent. It could fall to 8 percent, but that would most likely happen because even more workers have dropped out of the labor force. And that's a worrisome trend. The U.S. labor participation rate is at its lowest level since the early 1980s.