US job growth undershoots expectations in September, but labor market remains stable
SPY•US nonfarm payrolls rose by 29,000 in September, below economists’ 90,000 forecast, while the unemployment rate increased to 4.2% from 4.1%. Revisions showed 60,000 fewer jobs added in July and August than previously estimated, and annual wage growth slowed to 3.0%.
1. Hiring slows in September
Nonfarm payrolls increased by 29,000 in September after a downwardly revised gain of 133,000 in August. Economists had expected a 90,000 increase. July payrolls were revised to show a loss of 10,000 jobs, and the combined July-August total was revised down by 60,000.
2. Unemployment and wages
The unemployment rate rose to 4.2% from 4.1% as 485,000 people entered the labor force; the participation rate increased to 61.8% from 61.6%. Average hourly earnings rose 0.1% for the month, bringing annual wage growth to 3.0% from 3.1% in August.
3. Policy and sector details
Economists said the report reflected a low-hire, low-fire labor market and noted that payrolls can underperform when Labor Day falls late in September. Healthcare added 17,000 jobs, while government employment fell by 17,000. Markets’ October rate-hike odds moved from 13% to about 23%; the Fed had raised its benchmark rate by 25 basis points last month to a 3.75%-4.00% range.
