WASHINGTON — The nation’s employment health — it turns out — is not dangerously deteriorating after all.
Tweaking a phrase from Mark Twain, worries about the job market’s demise were greatly exaggerated.
Fears that the country could slide into a recession eased in September as employers created the most jobs in four months and workers’ wages grew solidly. The unemployment rate crept up to 4.7 percent, the highest in over a year but still low by historical standards.
“After a couple more tests, it now looks like the patient is in much better health,” said Richard Yamarone, economist at Argus Research.
Wall Street breathed a sigh of relief. The Dow Jones industrial average closed up 91.70 points. The Standard &Poor’s 500 index, the measure most closely followed by market watchers, reached a new closing high of 1,557.59.
The tally of 110,000 net new jobs generated in September clearly heartened investors and analysts. Yet what they really took comfort in was the revelation that the job market — a main pillar for the economy — didn’t crack under the pressure of a painful credit crunch and housing slump in August, after all.
The Labor Department’s fresh snapshot of employment conditions nationwide, released Friday, showed the economy actually created 89,000 jobs in August.
That was a huge and crucial turnaround from the loss of 4,000 jobs — the first decline in four years — reported a month earlier. At the time, that news sent Wall Street into a nosedive, stoked fears the economy was heading toward recession and was seen as cementing the Federal Reserve’s decision to lower interest rates.
To be sure, the ill effects of the housing and credit problems have hurt some employers, slowing national job growth this year. But the situation is nowhere near as dire as many were led to believe from the initial August employment report.
“We are on much sounder footing,” said Carl Tannenbaum, chief economist at LaSalle Bank. “To be fair, it is clear the pace of monthly job creation has slowed and the unemployment rate is creeping higher, but neither measure is indicative of an imminent recession, which was the scenario on everyone’s lips just a month ago.”
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