When it finally came out Tuesday, the September jobs report — delayed for 18 days by the government shutdown — showed a labor market moving forward. But the pace was slow enough to prompt many economists to view it as a letdown.
Job growth "is disappointing, given that employment is still down by about 1.8 million from its peak prior to the recession," Gus Faucher, senior economist with PNC Financial Services Group, said in his analysis.
The Labor Department said employers added 148,000 jobs last month — the 43rd straight month of growth. The unemployment rate slipped to 7.2 percent, down a 10th of a point from August. Still, the number of people with paychecks remained lower than before the Great Recession, with many potential workers not even in the game. They were sitting at home, rather than trying to find jobs.
The report showed labor-force participation was unchanged in September at 63.2 percent, but that rate's "long-term decent will continue" unless employers give sidelined workers more reason to resume job searches, Doug Handler, an economist with IHS Global Insight, wrote in his assessment.
Still, beneath the disappointing data, one could find some reasons for optimism in the new year. For one thing, economists are virtually unanimous in saying the relatively weak labor market makes it more likely the Federal Reserve will continue its efforts to stimulate growth.
Throughout the recession and weak recovery, the Fed has used all of its monetary tools to push down interest rates. One of those efforts involves a bond-buying program that has the effect of restraining long-term interest rates. In June, the Fed indicated that U.S. economic growth was getting strong enough that the central bank might begin to "taper" down its stimulus effort.
But given this month's economic disruptions caused by the federal government shutdown — combined with last month's sluggish job growth — the Fed probably will not act until 2014. "A December taper remains possible, but now is increasingly unlikely," Handler said.
Translation: Interest rates probably will still be low on home mortgages come spring.
Meanwhile, the September jobs report showed an increase in construction jobs, up about 20,000 workers. A separate report Tuesday from the Commerce Department showed that in August, private residential construction spending hit the highest level in five years.
So the real estate market may look pretty good for the spring buying season, with fresh inventory and cheap mortgages. A surge in homebuying would boost growth for lots of Americans, in construction, retail, landscaping and so on.
But that optimism assumes Congress will avoid another shutdown and debt ceiling crisis this winter. Congress has set a schedule for itself to complete a budget in January and resolve debt-ceiling issues by Feb. 7. If those federal fiscal matters are resolved in the winter, the economy could brighten with the blossoms. "Job growth should be stronger in 2014 as the drag from fiscal policy on economic growth lessens," PNC's Faucher said.