US hiring soars past expectations in sign of resilient market / Photo: © AFP/File
US hiring soars past expectations in sign of resilient market
Hiring in the United States picked up significantly more than expected in September while the jobless rate crept lower, according to government data released Friday, offering relief to policymakers ahead of November's election.
The world's biggest economy added 254,000 jobs last month, the Department of Labor said. This was markedly higher than August's 159,000 number, which was also revised upwards.
A consensus estimate by Dow Jones had expected growth of 150,000.
The unemployment rate dipped from 4.2 percent to 4.1 percent, the report added.
The health of the job market has come into focus over recent months as high interest rates bite -- but the pick-up in hiring should assuage concerns that the Federal Reserve waited too long to slash rates last month, risking a downturn.
Economic issues are also among the most important for voters ahead of November's presidential election, as households grapple with higher costs of living after high inflation during the Covid-19 pandemic.
The Fed had rapidly hiked the benchmark lending rate in 2022 to ease demand and tamp down surging inflation. Price increases have eased in recent times, allowing the central bank to begin rate reductions.
As for wages, average hourly earnings in September were up 0.4 percent from a month ago to $35.36, slightly above expectations.
From a year ago, wages have risen by 4.0 percent, the report noted.
- Strike impact? -
The Fed's half percentage point rate cut in September was "unusually large" according to Dan North, senior economist for Allianz Trade North America.
"It's most likely that the Fed cut so much because it felt that it had fallen behind in its mission to balance employment and inflation," he told AFP.
The stronger than expected report on Friday might mean the Fed can take a more gradual path to rate cuts, given that the economy appears to be holding up.
On Friday, the Labor Department noted that "employment continued to trend up" in areas like food services, health care, government and construction.
But economist Nancy Vanden Houten of Oxford Economics warned that even though a strike by Boeing workers did not affect September's employment data much, it could weigh on job growth if it persists through mid-October.
About 33,000 workers in the Pacific Northwest region walked off the job on September 13, effectively shutting down assembly plants for the 737 MAX and 777 after overwhelmingly voting down a contract offer.
"Hurricane Helene may also weigh on job growth in October," she added.
(G.Khurtin--DTZ)
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