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Concerns That Slowed Sept. Hiring Likely To Linger

A category that includes hotels, restaurants and entertainment companies, such as amusement parks, has added just 5,000 jobs over the past three months. That's down from 146,000 over the previous three months.

Retailers are still hiring. But the 21,000 positions they added in September were the fewest in six months.

The slowdown may reflect an ongoing response to the tax increases that took effect this year, Koropeckyj said. Americans are taking home less pay because of a 2 percentage point increase in Social Security taxes. A person earning $50,000 a year has about $1,000 less to spend this year. A household with two high-paid workers has up to $4,500 less. Income taxes for upper-income households also rose.

Consumer confidence plummeted during the government shutdown to the lowest level in nearly two years, according to Gallup. And pay raises have been slight: Average hourly pay rose just 2.1 percent in September from 12 months earlier. That's barely keeping up with historically low inflation.

Many economists estimate that the partial government shutdown cut $25 billion out of the economy and slowed growth to about a 2 percent annual rate in the October-December quarter. That's weaker than estimates before the shutdown that the economy would expand at a 2.5 percent annual rate this quarter.

The shutdown delayed the release of the September jobs report for 18 days. It will also delay the scheduled release of the October jobs report by a week, until Nov. 8.

In the meantime, the still-tight job market has discouraged many Americans from seeking jobs. The percentage of Americans who are working or looking for work remained at a 35-year low last month.

That helps explain why the unemployment rate dipped to a still-high 7.2 percent in September from 7.3 percent in August. The government doesn't count people without a job as unemployed unless they're looking for one. The drop in unemployment from 7.9 percent at the start of the year has occurred mainly because many people aren't actively seeking jobs.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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