A closely watched report released by the Labor Department on Friday showed employment in the U.S. increased by much more than expected in September.
The Labor Department said non-farm payroll employment jumped by 254,000 jobs in September after climbing by an upwardly revised 159,000 jobs in August.
Economists had expected employment to rise by 140,000 jobs compared to the addition of 142,000 jobs originally reported for the previous month.
The stronger-than-expected job growth partly reflected notable increases in employment in the leisure and hospitality and health care and social assistance sectors, which added 78,000 jobs and 71,700 jobs, respectively.
The report also showed the unemployment rate edged down to 4.1 percent in September from 4.2 percent in August. Economists had expected the unemployment rate to remain unchanged.
The unexpected dip in the unemployment rate came as the household survey measure of employment surged by 430,000 persons compared to the 150,000-person increase by the labor force.
“The job market had been weakening this year, but appears to be firming up,” said Chris Zaccarelli, Chief Investment Officer, of Independent Advisor Alliance.
He added, “This should put to rest – at least for the next month – the idea that the economy is about to fall off a cliff or that imminent doom is on the horizon.”
The report also said average hourly employee earnings climbed by $0.13 or 0.4 percent to $35.36 in September. The annual rate of wage growth ticked up to 4.0 percent in September from 3.9 percent in August.
Final Thoughts
The U.S. Labor Department’s report indicating stronger-than-expected job growth in September signals a resilient labor market, despite concerns about a potential economic slowdown. The notable gains in sectors such as leisure, hospitality, and healthcare underscore the economy’s continued recovery and demand for services, which have been pivotal in supporting overall job creation.
The unemployment rate’s slight dip to 4.1% suggests more people are finding work, which aligns with the surprising 430,000-person increase in employment, a figure significantly higher than what economists had anticipated. This kind of robust job growth is a positive indicator of economic stability, at least for the near term.
However, the report also has broader implications for monetary policy and inflation concerns. With wage growth ticking up to 4.0% annually, there is the potential for wage inflation to persist, which could keep pressure on the Federal Reserve to maintain higher interest rates for longer than previously expected.
While the job market remains strong, rising wages may complicate the Fed’s efforts to cool inflation, as higher incomes can fuel consumer spending and thus keep inflation elevated. The labor market’s resilience, while welcome news, introduces new challenges for managing inflation without stifling economic growth.
Article Source: RTT News
