April 16, 2024

US adds 336,000 jobs in September in sign of resilience

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WASHINGTON (AP) – The nation’s employers added 336,000 jobs in September, an unexpectedly robust gain that suggests that many companies remain confident enough to keep hiring despite high interest rates and a hazy outlook for the economy.

Hiring last month jumped from a 227,000 increase in August, which was revised sharply higher. July’s gain was also healthier than had been initially estimated. The economy has now added an average of 266,000 jobs a month in the past three months. The sustained strength of the labor market makes it likelier that the Federal Reserve will raise its key rate again before year’s end as it continues its drive to tame inflation.

Friday’s report from the Labor Department showed that the unemployment rate was unchanged at 3.8%, not far above a half-century low.

The job market has defied an array of threats this year, notably high inflation and the rapid series of Fed interest rate hikes that were intended to conquer it. Though the Fed’s hikes have made loans much costlier, steady job growth has helped fuel consumer spending and kept the economy growing, defying long-standing predictions of a forthcoming recession.

Across the economy last month, most large industries added jobs, from health care, which gained 66,000, to manufacturing, which added 17,000, to retailers, which added nearly 20,000. Professional services, a category that includes engineers and architects, gained 21,000. Government at all levels added 73,000 jobs, reflecting the healthy budgets of most state and local governments.

Yet wage growth slowed, with average hourly pay rising just 0.2% from August to September. Compared with a year earlier, wages are up 4.2%, the mildest 12-month increase in more than two years.

It’s possible that the cooling of pay growth may help reassure the Fed’s inflation fighters, who are scrutinizing every scrap of data to determine whether to raise their key rate once more this year. Still, the outsize job growth may stoke worries that the economy will expand too fast for inflation to cool.

The Fed’s benchmark rate stands at a 22-year high of roughly 5.4% after 11 hikes beginning in March 2022. The central bank’s rate increases have led to much higher borrowing costs for consumers and businesses across the economy.

Fed officials, including Chair Jerome Powell, have stressed that inflation remains too far above their 2% target and that another rate hike might be needed to slow it to that level. At the same time, several Fed policymakers have underscored that they want to be careful not to raise borrowing rates so much as to trigger a deep recession.

Goldman Sachs has estimated that the economy’s growth in the current October-December quarter could slow to an annual rate as low as a 0.7%, sharply below a roughly 3.5% pace in the July-September quarter.

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