US employers added fewer than 150,000 jobs last month, far below expectations, holding out hope among some experts that the Fed will again postpone its long anticipated interest rate hike.
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Last month, the non-farm payroll figures for June and July were revised up, causing the unemployment rate to drop to 5.1%. The Bureau also reduced its previously released totals for August from 173,000 down to 136,000 jobs.
After averaging 260,000 net new jobs a month past year, the labor market is averaging just 167,000 over the last three months. According to economists’ estimates, “The economy now only needs to add about 100,000 jobs a month to keep up with population growth”.
The report suggests the labor market downshifted this summer after an 18-month stretch of robust job creation, succumbing to stock market turmoil and mounting worries over a slowdown in China.
Economists at BNP Paribas said that there was a “decent” chance that the Fed would raise rates even later than March “given weather risks that could distort data over the winter”. Mining employment reached a peak in December, 2014, but has since declined by 102,000 jobs. With GDP growth hovering near 2.0 percent, weaker job growth is to be expected, but it will make it much more hard for the Federal Reserve Board to raise rates this year.
September was a good month for the jobless rate of the United States.
The shock report took markets by surprise with the Dow Jones dropping 250 points in early trading.
Of the 142,000 positions added in September, men and women gained 82,000 and 60,000 jobs, respectively.
Over the course of the recession, labor force participation has shrunk both because many workers have struggled to find jobs and have quit searching and because of ongoing demographic changes, including the incipient retirement of the Baby Boom generation.
The labor-force participation rate, already hovering near the lowest level since the 1970s, fell to 62.4% from 62.6%. Eventually, the slow global growth is expected to hurt US trade and jobs.
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Average hourly earnings fell 1 cent to $25.09, following a 9 cent gain in August. Retailers increased payrolls by 24,000. Many investors were skeptical whether the Fed could tighten before the end of the year, and today’s job data seems to have pushed a rate-hike out into 2016, based on information from The Wall Street Journal. The yield on the 10-year Treasury note fell to 1.96 percent from 2.04 percent shortly before the job survey was released.
