103K jobs added in September, unemployment still 9.1%

— -- Hiring picked up more than expected in September, with employers adding 103,000 jobs as gains in healthcare and professional and business services more than offset continued layoffs by state and local governments.

The nation's unemployment rate, which is calculated from a different survey, was unchanged at 9.1%, the Bureau of Labor Statistics said. Employment gains were offset by a large increase in the labor force.

The job growth was modest and was buoyed by the return of 45,000 striking Verizon workers. Still, the surprising rebound from last month's disappointing report helped ease fears that the economy is on the verge of sliding into another recession.

"It certainly shows the economy is still growing," says Jim O'Sullivan, chief economist at MF global.

Economists were also heartened by significant positive revisions to reports for the previous two months showing the nation gained 99,000 more jobs than estimated. Payroll growth in July was revised to 127,000 from 85,000, and to 57,000 from zero in August.

September's growth soundly beat expectations. Economists estimated payrolls grew by only about 60,000 last month. And the private sector gained 137,000 jobs, more than the 90,000 believed.

Still, after adding an average 131,000 jobs a month the first half of the year, employers added just 96,000 a month in the third quarter. The European debt crisis, the debt ceiling showdown in Congress and a tumultuous stock market helped sap consumer and business confidence.

The soft patch in the economy and job market is expected to continue. O'Sullivan expects employers to add about 100,000 jobs a month in the fourth quarter and 150,000 a month in 2012. That's not enough to noticeably lower the jobless rate.

President Obama has proposed a sweeping job creation package to stimulate employment growth but most of it is not expected to pass muster with deficit wary Republicans in Congress.

Last month's report included several positive signs. The average workweek rose to 34.3 hours from 34.2 hours, reversing a similar decline in August. And average hourly earnings jumped to $23.12 from $22.08 in August.

Employers also added 19,000 temporary employees, and the estimated increase in such workers the previous two months was revised up by 28,000. The hiring of temporary workers typically heralds the addition of permanent workers.

Yet there were also worrisome signals. The number of Americans working part-time even though they wanted full-time work jumped to 9.3 million from 8.8 million and is up by nearly 1 million since July. That helped increase the underemployment rate - which also includes the unemployed and people who have given up looking for jobs - to 16.5% from 16.2% the previous month.

The number of Americans out of work at least six months rose to 6.2 million - or nearly 45% of all those unemployed - from 6 million.

Several strongly performing industries continued to lead in job growth. Professional and business services added 48,000 jobs while healthcare added 41,000. The struggling construction sector added 26,000 jobs as nonresidential building has strengthened recently. Retailers added 13,600 workers.

But manufacturers cut 13,000 jobs, financial firms trimmed 8,000 and leisure and hospitality payrolls fell by 4,000.

Meanwhile, government remains the biggest drag on job growth. Local governments cut 35,000 jobs in September and have lost 535,000 the past three years.