US job growth exceeded expectations in September, with employers adding an estimated 254,000 jobs, according to the Bureau of Labor Statistics. This figure surpasses August’s upwardly revised total of 159,000 and far exceeds economists’ predictions of 140,000 job gains. The unemployment rate also dropped slightly to 4.1%, indicating a resilient labor market amidst ongoing economic fluctuations.
Brian Bethune, an economist and professor at Boston College, commented on the robust job numbers, stating, “We had a bounce-back now in September from what were relatively sluggish numbers in July and August. So it looks like we’re still on track. The economy is expanding, and we have a very high probability of achieving a soft landing.” The substantial hiring was predominantly driven by the service sector, particularly in health care, which added 71,700 jobs, and leisure and hospitality, which saw an increase of 78,000 jobs. Collectively, service industries contributed 202,000 jobs to the monthly gains, while goods-producing sectors experienced more subdued hiring, with construction adding 25,000 jobs but manufacturing losing 7,000.
The Federal Reserve, which is focused on maintaining the stability of the labor market, is closely monitoring these employment figures for signs of potential weakness. Chris Rupkey, chief economist at FwdBonds LLC, described the September job numbers as a “truly monster jobs number,” suggesting that the economic expansion remains on course. Despite the cooling of the job market over the past year as it adjusts to pre-pandemic levels, experts remain optimistic about the underlying fundamentals of employment and wage growth.
Average hourly earnings increased by 0.4% in September, raising the annual rate to 4% from 3.9% in August. Overall, the US has added an average of 199,000 jobs per month in 2023, a number that, while below last year’s average of 251,000, still exceeds pre-pandemic gains. With September’s job growth marking 45 consecutive months of positive job growth, the economy continues to show resilience.
As inflation trends toward the Federal Reserve’s target rate of 2%, the central bank has expressed a renewed focus on ensuring employment remains healthy. The recent rate cut by the Fed has instilled a sense of optimism regarding future job growth, as businesses may now feel more confident in hiring due to lower borrowing costs. Josh Hirt, senior US economist at Vanguard, indicated that the Fed is likely to proceed with a deliberate approach to future rate cuts, removing any urgency for aggressive moves.
Looking ahead, the October employment report may face disruptions due to the ongoing strike at Boeing and the effects of Hurricane Helene. However, with an agreement reached to suspend the dockworkers’ strike, analysts remain hopeful that the job market can sustain its momentum.
