The U.S. labor market saw a stronger-than-expected rebound in September, with nonfarm payrolls increasing by 254,000 jobs, outpacing forecasts. The unemployment rate fell to 4.1%, signaling continued resilience despite rising labor supply and moderating hiring trends.
Labor Market Shows Unexpected Strength
September’s job growth exceeded the 140,000 positions predicted by economists, reflecting a significant recovery from August’s upwardly revised figure of 159,000 jobs. The labor market benefited from low layoffs, bolstered by solid consumer spending, even as labor supply expanded, largely due to increased immigration.
Wage Growth and Economic Resilience
Average hourly earnings grew by 0.4% in September, marking a 4.0% year-on-year increase. Despite initial concerns over a potential economic slowdown, benchmark revisions to national data last week indicated the U.S. economy is in better shape than previously estimated, with upgrades to growth, income, and corporate profits.
Fed’s Rate Cut Approach Likely to Slow
With the improved labor market data, the Federal Reserve may temper its plans for further rate cuts. Fed Chair Jerome Powell has signaled caution, suggesting the committee is not in a rush to implement aggressive rate reductions, even as financial markets anticipate a quarter-point cut in November.
Though the labor market shows strength, the effects of strikes and Hurricane Helene’s impact on the Southeast may introduce volatility in the coming months.
What To Expect from September’s Jobs Report: A Gradual Slowdown With Potential Surprises
