A few 579,000 people dropped out of the workforce, helping to leave the unemployment rate in September unchanged at a seven-year low of 5.1 percent, as expected.
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The addition of 142,000 jobs followed a revised 136,000 gain the prior month that was lower than previously estimated, a Labor Department report showed Friday in Washington.
The unemployment rate held steady at 5.1 percent, but wage growth was flat for the month, meaning workers weren’t taking home more.
On Friday, Labor also revised down the number of jobs created in July and August by 14 percent.
The U.S. gained 4,600 temp jobs in September, but the year-over-year growth rate slowed for the third consecutive month, according to seasonally adjusted data from the US Bureau of Labor Statistics.
And the weak report will no doubt complicate the task of US Federal Reserve officials, deciding when to raise interest rates for the first time in a decade. The ranks of people who have only been able to find part-time situations or who have seen their hours cut fell significantly by 447,000 in September. “That said, Federal Reserve Bank of San Francisco president John Williams said he expects the Fed to raise the fed funds rate this year, hinting the October 28 date was still in play”, said Robert Dye, chief economist at Comerica Bank.
Total nonfarm jobs also fell short of analysts’ projections; Bloomberg reported the increase fell below the median forecast of 96 economists, which called for a 201,000 advance.
The White House acknowledged the blow, noting “the economy added jobs in September at a pace below that seen earlier in the year, as slowing growth overseas and global financial turmoil have weighed on economic activity”.
Average hourly earnings declined by 1 cent to $25.09, after a 9-cent gain the previous month.
There were other signs of persistent weaknesses that the Fed views as showing slack in the jobs market. “I think this ends any possibility of the [Federal Reserve] raising rates later this month, chances of which were slim to begin with”. The labor force participation rate, or the share of the working-age population employed or looking for a job, further declined to 62.4 percent for the fourth consecutive month. “After last month we could all point to jobs, and say at least they are holding in there”.
A disheartening performance from the U.S. labour market has pushed back hopes of an interest rate rise until next March. The unemployment rate was expected to hold steady at 5.1%.
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The September jobs report is definitive evidence of a slowing economy, according to Mr. Hicks.
