Employers added 254,000 jobs in September, blowing away forecasts
CBS 4 News
Employers added 254,000 jobs in September, blowing away forecasts and reversing a slowdown in hiring that had prompted the Federal Reserve to make a jumbo rate cut at its meeting last month.
Economists had forecast 140,000 new jobs, according to financial data provider FactSet.
The unemployment rate inched down to 4.1%, versus 4.2% in the prior month.
The employment report marks the second-to-last reading on the labor market before the Federal Reserve's November 7 rate decision meeting, when the central bank is expected to once again cut its benchmark rate. The Fed last month made a jumbo cut, its first rate reduction in four years, in the face of weakness in hiring and a cooling economy.
But September's surprisingly strong hiring suggests that the U.S. could be headed for a so-called "soft landing," with the Fed's prior rate hikes having helped to cool the economy while skirting a recession, experts said.
"Today's data hit a grand slam with payrolls coming in strong, positive revisions and unemployment falling," noted Lindsay Rosner, head of multisector investing within Goldman Sachs Asset Management, in an email. "The economy is heading into the post-season solidly.
The strong data could give the Fed more flexibility at its November rate cut meeting, giving the central bank the breathing room to either issue a smaller rate cut of 0.25 percentage points, versus its 0.5 percentage point cut last month, experts says.
Employers had added 159,000 jobs in August and 144,000 in July, according to the Labor Department's revised figures for the prior two months.
Wages growing faster than inflation
Average hourly wages rose 4% last month on an annual basis, signaling that workers are keeping ahead of inflation, which stood at an annual pace of 2.5% in August.
Inflation likely dropped to 2.3% last month, according to economists polled by FactSet. The Consumer Price Index report for September will be released on October 10.
Restaurants and other food services businesses added 69,000 jobs last month, while health care companies added 45,000 jobs, the Bureau of Labor Statistics said.