The U.S. labour market showed robust growth in September, with nonfarm payrolls increasing by 254,000, the highest in six months. The unemployment rate dipped to 4.1% from 4.2%, reflecting a stronger-than-expected performance that may dampen calls for aggressive rate cuts by the Federal Reserve.
- Job Growth: Payrolls surged by 254,000 in September, beating expectations of 140,000. Revisions for July and August added 72,000 jobs, further improving the outlook.
- Sector Performance: Strong hiring across hospitality, healthcare, and government sectors. Restaurants and bars added 69,000 jobs, while healthcare grew by 45,000. However, manufacturing shed 7,000 positions, primarily in the motor vehicle industry.
- Wages and Hours: Average hourly earnings rose by 0.4% month-on-month, up 4.0% year-on-year, while the average workweek slightly declined to 34.2 hours.
- Economic Outlook: Fed Chair Jerome Powell indicated no rush for deep rate cuts, especially as economic data remains strong. The FedWatch Tool now puts the likelihood of a 25-bps rate cut in November at 95%, with the chances of a larger cut diminishing.
- Challenges Ahead: The labour market could face turbulence in October due to external factors like Hurricane Helene and the ongoing Boeing strike. However, strong employment figures provide a buffer against further economic shocks.
The September jobs report showcases a resilient U.S. economy, bolstered by job creation and steady wage gains. With the Fed signalling caution on rapid rate cuts, the labour market appears on solid footing heading into the year’s final quarter.
