U.S. employers added 29,000 jobs in September; unemployment rate held at 4.2%
Hiring slowed from its 12-month pace, and the government revised July and August payrolls lower.
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Midwatch Radar Updated
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U.S. employers added 29,000 jobs in September and the unemployment rate was 4.2 percent, the Bureau of Labor Statistics (BLS) reported Friday [1]. BLS said both measures changed little in the month [1].
The September gain followed an average monthly gain of 45,000 over the prior 12 months [1]. BLS revised July down by 31,000, from +21,000 to -10,000, and August down by 29,000, from +162,000 to +133,000 [1]. The unemployment rate has stayed between 4.1 percent and 4.3 percent since March, and 7.1 million people were unemployed in September [1].
Average hourly earnings for private-sector employees rose 5 cents, or 0.1 percent, to $37.81, and are up 3.0 percent over the past 12 months [1]. Health care added 17,000 jobs, slower than its 12-month average gain of 33,000, and construction added 11,000 [1]. BLS described construction as little changed, along with retail trade, leisure and hospitality, and manufacturing (+9,000) [1]. Financial activities was little changed at -7,000, and the average private-sector workweek stayed at 34.4 hours [1].
On September 16, the Federal Reserve’s policy committee voted 12 to 0 to raise its target range for the federal funds rate, the short-term benchmark interest rate, by 1/4 percentage point to 3-3/4 to 4 percent [2]. Its statement said job gains have kept pace with the workforce and that the increase will support a timelier return to the committee’s 2 percent inflation goal [2].
For an owner who hires, an unemployment rate that has held between 4.1 and 4.3 percent since March describes a labor market that has not moved sharply in either direction. Pay growth of 3.0 percent over 12 months is the average increase across private employers, a reference point for what other employers are paying compared with a year ago.
The downward revisions mean the earlier readings for July and August overstated job growth, and July now shows a loss of 10,000 jobs [1]. A flat 34.4-hour average workweek indicates employers did not add hours either [1]. Lenders often tie variable-rate business loans and credit lines to short-term benchmark rates, so a Fed increase can raise borrowing costs for a business with that kind of debt. Where rates go from here depends on data such as this report and the next inflation reading.