U.S. employers added a surprisingly strong 254,000 jobs in September, the latest evidence that the U.S. labor market is strong enough to support steady hiring and economic growth.
Employment growth last month was a significant increase from the 159,000 jobs added in August, and the unemployment rate fell to 4.1% from 4.2%, the Labor Department said Friday.
The latest figures suggest many companies remain confident enough to fill jobs despite the pressure of continuing high interest rates. Few employers lay off workers.But many people have become more cautious about hiring.
In a report Friday, the Labor Department revised upward its estimates of job growth for July and August by a combined 72,000.
September’s job gains were fairly broad and a healthy sign. Restaurants and bars added 69,000 jobs. Healthcare businesses increased by 45,000, government organizations increased by 31,000, social care employers increased by 27,000 and construction companies increased by 25,000. The category, which includes professional and business services, added 17,000 people after three straight months of job losses.
Average hourly increases were also solid. It rose 0.4%, which was higher than expected compared to August and slightly lower than the 0.5% rise the previous month. Compared to a year ago, hourly wages rose 4%, one notch higher than the 3.9% year-over-year increase in August.
The economy’s progress in curbing inflation prompted the Federal Reserve last month to base interest rate reduction For the first time in over 4 years. The Federal Reserve has said it wants to ease borrowing costs to strengthen the job market.
The resilience of the economy came as a relief. Economists had expected the Fed’s aggressive campaign to curb inflation – raising interest rates 11 times in 2022 and 2023 – would lead to a recession. It wasn’t like that. The economy continued to grow even as borrowing costs continued to rise for consumers and businesses.
Most economists say the Fed appears to have achieved the once-unlikely prospect of a “soft landing,” in which higher interest rates would help the economy overcome inflation without triggering a recession. “It’s already safe.”
As the November 5 presidential election approaches, the economic situation is putting great pressure on voters. Many Americans are unimpressed with the durability of the job market and frustrated by still-high prices. Prices are on average 19% higher than in February 2021. This was when inflation began to surge as the economy rebounded from the pandemic recession with unexpected speed and strength. , causing severe shortages of goods and labor.
Public dissatisfaction with inflation and the economy under President Joe Biden has been a political burden for Vice President Kamala Harris, who is competing for the White House with former President Donald Trump.
But most indicators across the economy look solid. The U.S. economy, the world’s largest economy, grew at a robust 3% annually from April to June, driven by consumer spending and business investment. Slower but still healthy annual growth is expected to reach 2.5% in the just-ended July-September quarter, according to the Federal Reserve Bank of Atlanta’s forecasting tool.
The Institute for Supply Management, an association of purchasing managers, reported that the U.S. service business grew for a third straight month in September and at an unexpectedly fast pace. The service sector of the economy is closely watched because it accounts for more than 70% of U.S. jobs.
Households nationwide last month Increased spending at retail stores.. Despite the slowdown in hiring, Americans enjoy unusual job security. Layoff rates are near record lows relative to employment. number of people Apply for unemployment benefits It’s also near historically low levels.
Despite some companies’ reluctance to expand benefits, companies in general seem reluctant to lay off workers. This unusual dynamic may stem from the fact that many employers have been incompetent and understaffed since the economy began recovering from the pandemic recession.
Posted Job OpeningsIt peaked at 12.2 million in March 2022 and then steadily decreased to 8 million in August.
Workers noticed the cold conditions for job seekers. Far fewer people feel confident enough to quit their job to find a better position. number of americans quit one’s job It reached its lowest level since August 2020, when the economy was still struggling due to COVID-19.
Two and a half years of high interest rates seem to have taken a toll on the job market. But relief may come.
The Federal Reserve cut the benchmark interest rate by 0.5 percentage points last month, the first and largest interest rate cut since the 2020 recession. The central bank said progress in efforts to combat inflation was encouraging. Consumer prices rose 2.5% in August from a year earlier, barely above the Fed’s 2% inflation target, and fell significantly from the 9.1% year-over-year peak in June 2022.
The Fed’s focus has shifted this summer to supporting the job market as hiring slows and unemployment rises. Despite this, it remains at a relatively low level. The central bank plans to cut interest rates twice more this year and is expected to cut rates four more times in 2025.
Expectations that borrowing costs will be lower may encourage employers to speed up hiring.
