Nicholas Wealth Management CEO David Nicholas explains how a port strike could affect the stock market and the wider economy at Varney & Co.
US job growth rose in September, beating economists’ expectations, while the unemployment rate was little changed.
The Labor Department on Friday reported that employers added 254,000 jobs in September, more than the 140,000 gain predicted by LSEG economists.
The unemployment rate fell slightly from last month to 4.1%.
The number of jobs added in the past two months were both revised up, with July job creation revised up by 55,000 from a gain of 89,000 to 144,000, and August revised up by 17,000 from 142,000 to 159,000.
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The September jobs report beat economists’ expectations, adding 254,000 jobs. (Photographer: Angus Mordant/Bloomberg via Getty Images/Getty Images)
Private sector payrolls grew faster than LSEG economists had expected, with 223,000 jobs added compared to a forecast of 125,000. Manufacturing wages fell 7,000 in September, a larger drop than the 5,000 drop that had been estimated.
Employment in food and drink increased by 69,000 in September – above the average monthly gain of 14,000 over the past 12 months. Job growth in the health care industry slowed to 45,000 last month after averaging 57,000 a month a year ago.
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Average hourly earnings for all self-employed workers rose 13 cents, or 0.4%, to $35.36 an hour. That brings returns over the past 12 months in September to 4%.
The labor force participation rate was unchanged for the third month in a row at 62.7% in September, the smallest change over the year.
The number of people classified as long-term unemployed, defined as having been out of work for 27 weeks or more, was little changed at 1.6 million in September, up from 1.3 million last year. Long-term unemployment accounts for 23.7% of all unemployed people.
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The number of workers increased by 121,000 million to 8.66 million – comprising 5.3% of the workforce. Part-time workers fell by 95,000 in September, while the number of full-time workers increased by 414,000.
“Today’s report put an impressive end to this week’s strong job data – a surprise across the board,” said Chris Larkin, managing director of trading and investing at E*Trade from Morgan Stanley. “Based on this data, not only is the labor market not on a cliff, it doesn’t appear to be anywhere near the bottom.”
Fed Chairman Jerome Powell announced the first interest rate cut in four years at the Fed’s last meeting in September. (Photo by ROBERTO SCHMIDT/AFP via Getty Images / Getty Images)
Policymakers at the Federal Reserve have been keeping a close eye on the labor market after cutting interest rates for the first time in four years at the central bank’s last meeting in September. The Fed lowered the benchmark federal funds rate by 50 basis points from a range of 5.25% to 5.5%, to a new level of 4.75% to 5%.
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Markets reacted to the larger-than-expected gains in the labor market by reducing the likelihood of a 50 basis point cut. Interest rate traders saw a 53% chance of a 50 basis point cut as of last week, down from 32% as of yesterday, according to the CME FedWatch tool. After the jobs report was released, those odds fell to 9% as of Friday morning.
“This strong report increases the likelihood that the economy will continue to grow above normal in the coming quarter,” said LPL Financial Chief Economist Jeffrey Roach. “Our basic case is that the Fed will cut by a quarter over the next few meetings.”
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