Washington (AFP) – The US jobless rate crept up in September although hiring exceeded analyst expectations, according to a delayed employment report published Thursday after a record-long government shutdown. The figures, marking the last official jobs report before the Federal Reserve’s next policy meeting, paint a mixed picture of a softening — but not rapidly crumbling — labor market. This could deepen a divide in the central bank on whether a third straight interest rate cut is warranted in December, with some officials already pushing for lower rates to boost the economy and others likely arguing that policymakers can wait a little longer.
The world’s biggest economy added 119,000 jobs in September — a robust uptick from August — but the unemployment rate edged up from 4.3 percent to 4.4 percent, said the Labor Department. Meanwhile, revised data for August showed that the employment situation was gloomier than originally estimated, with the economy shedding 4,000 jobs, rather than adding 22,000 as had been reported. Analysts note that even though unemployment ticked higher, this appears to be because more people entered the labor force seeking jobs.
Thursday’s publication marks the first official snapshot of the overall labor market’s health in over two months, due to a 43-day government shutdown that ended just last week. But this also means that the data is backward-looking, at a time when the jobs market has been weakening amid mass firing of federal workers and the turmoil from President Donald Trump’s multiple tariffs on imports. A sharply weakening jobs market could nudge the Fed towards further rate cuts to support the economy, but the central bank is also trying to keep inflation in check. Traders now see a 60 percent chance the Fed will keep rates unchanged in December, according to CME Group’s FedWatch tool.
The sharp hiring rebound “soothes concerns that the labor market was on the precipice of a large downturn and removes urgency for another rate cut,” said Nationwide chief economist Kathy Bostjancic. She added that the unemployment increase was “for good reasons as more people came into the labor force looking for a job, driving up the labor force participation rate 0.1 percentage point to 62.4 percent.” Overall, the latest report shows “a somewhat softer labor market, but not one that is rapidly declining in strength,” said Mortgage Bankers Association chief economist Mike Fratantoni.
Yet, even if the jobs market was not “crumbling before the government shutdown,” federal employment likely fell more steeply in October, warned Oxford Economics lead economist Nancy Vanden Houten. This is because “workers who signed up for the Trump administration’s deferred resignation program will drop off payrolls,” she said. The Labor Department is not publishing unemployment figures for October, saying that the shutdown had impacted some survey data collection. Instead of releasing a full jobs report for that month, available figures will be put out alongside November’s numbers on December 16.
According to Thursday’s report, job losses occurred in transportation and warehousing, as well as in the federal government in September — even as there were gains in areas like health care. Federal government employment dropped by 3,000 and is down by 97,000 since reaching a peak in January, the report added. Average hourly earnings rose by 0.2 percent to $36.67 in September. The overall hiring figure was higher than analysts expected, with surveys of economists by Dow Jones Newswires and The Wall Street Journal expecting job gains of 50,000 instead.
© 2024 AFP
