Hiring in the United States rose significantly more than expected in September while the unemployment rate edged lower, according to government data released on Friday, providing relief to policymakers ahead of the November election.
The world’s largest economy added 254,000 jobs last month, the Labor Department said. That was significantly higher than August’s figure of 159,000, which was also revised upwards.
A Dow Jones consensus estimate expected growth of 150,000.
The unemployment rate fell from 4.2% to 4.1%, the report added.
The health of the labor market has come into focus in recent months as high interest rates bite — but a rebound in hiring should assuage concerns that the Federal Reserve waited too long to cut interest rates last month, risking a recession.
Economic issues are also among the most important to voters ahead of November’s presidential election, as households face higher costs of living following high inflation during the Covid-19 pandemic.
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The Fed had quickly raised its key lending rate in 2022 to dampen demand and curb rising inflation. Price increases have eased recently, allowing the central bank to initiate interest rate cuts.
On the wages side, average hourly earnings in September rose 0.4% from the previous month to $35.36, slightly above expectations.
From a year ago, wages have risen 4.0 percent, the report noted.
Strike;
The Fed’s half-percentage-point rate cut in September was “unusually large,” according to Dan North, senior economist at Allianz Trade North America.
“It is quite possible that the Fed cut so much because it felt it had fallen behind in its mission to balance employment and inflation,” he told AFP.
Friday’s stronger-than-expected report may mean the Fed may take a more gradual path toward rate cuts as the economy appears to be holding up.
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On Friday, the Labor Department noted that “employment continued to grow” in sectors such as food services, health care, government and construction.
But economist Nancy Vanden Houten of Oxford Economics warned that while a strike by Boeing workers did not greatly affect September employment data, it could weigh on job growth if it continues into mid-October.
About 33,000 workers in the Pacific Northwest region walked off the job on Sept. 13, effectively shutting down assembly plants for the 737 MAX and 777 after overwhelmingly voting against a contract offer.
“Hurricane Helene may also affect job growth in October,” he added.
Source: AFP