The U.S. economy generated an impressive 336,000 jobs in the previous month, demonstrating employers’ willingness to continue hiring despite high interest rates and an uncertain economic outlook.
This blowout number far exceeded economists’ expectations of 170,000 new jobs in September, according to a survey by FactSet.
Furthermore, the strong payrolls figure was accompanied by upward revisions to prior months. The July and August data revealed an additional 119,000 jobs compared to previous reports, as stated by the U.S. Labor Department here.
“The surprise increase in payrolls for September, along with the upward revisions to the previous two months, indicates a strong positive momentum in net job growth,” commented Rubeela Farooqi, chief U.S. economist at High Frequency Economics, in a report.
The government also reported that the jobless rate remained steady at 3.8% in September.
In September, employment in various service-related industries expanded significantly. High growth was observed in leisure and hospitality, government, healthcare, professional and technical services, and social assistance.
The September hiring report arrives at a time when the Federal Reserve closely analyzes economic data to determine whether it should raise its benchmark rate again this year.
“The more significant message from the jobs report is that the economy still seems capable of absorbing strong job gains without resulting in higher wage inflation,” stated JPMorgan’s David Kelly and Stephanie Aliaga in a report to investors.
Robust job growth
Job growth has remained strong despite high inflation and the Federal Reserve raising interest rates at the fastest pace in four decades.
“This strong jobs number, combined with the rise in job openings in August and recent upward revisions to estimates of excess household savings, suggest potential risks to the short-term U.S. economic outlook,” said Brian Coulton, chief economist at Fitch Ratings, in an email. “The labor market will not cool down with job growth continuing at this rapid pace. This will exert upward pressure on wages, making it more likely that the Fed will further increase interest rates.”
The Fed closely monitors employee wages because excessive wage growth can contribute to inflation. The labor report for August showed a slight easing in average hourly earnings. Wages have increased by 4.2% over the past 12 months, reaching $33.88 per hour, surpassing the inflation rate of 3.7% in August.
U.S. stock futures fell slightly ahead of the report, with S&P 500 futures down by about 1%.
—The Associated Press contributed to this report.
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