US economy does not stand still: labour market exceeds estimates
254,000 new jobs created in September (vs. 150,000 expected) unemployment dropped to 4.1 per cent: data reinforcing Kamala Harris' run
3' min read
3' min read
The US labour market regained momentum: 254,000 jobs were created in the US in September and the unemployment rate fell to 4.1 per cent from 4.2 per cent. The performance clearly beat forecasts, which anticipated no more than 150,000 new jobs (the lowest only 70,000), amidst ranks of the jobless that had swelled to 4.3 per cent. And it defied more explicitly than other recent data, at least for the moment, the assumptions of continued risky weakening not only of labour but of the economy.
The labour exploit does not end there. In the previous two months, July and August, 72,000 more payrolls were created than originally estimated, a further sign of the resilience of employment. And in September, a broader measure of hardship that includes underemployment, from discouraged to part-time workers, also slipped, to 7.7 per cent from 7.9 per cent. At the same time, the labour force participation rate, those actively seeking or in employment, remained stable for the third consecutive month at 62.7 per cent.
Hourly wages, which showed monthly gains of 0.4 per cent, marched at a pace of 4 per cent over the past year, more than the 3.9 per cent posted in August and above expectations for September of 0.3 per cent monthly and 3.8 per cent annual. With inflation on the whole appearing to be slowing towards the Federal Reserve's ideal target of 2 per cent, the increases were seen by analysts first and foremost as further signs of solidity without raising immediate concerns about price impacts.
Drivers of new employment were hospitality and catering, with the creation of 69,000 payrolls, and healthcare, with 45,000. Building and construction added 25,000 jobs. The civil service contributed 31,000 payrolls. Other sectors were largely unchanged, from retail to finance, with manufacturing down 7,000 jobs. For hospitality it was a particular redemption, after a year marked by the average creation of 14,000 jobs per month.
If the employment turnaround can reassure the Fed and perhaps investors about recession risks, it could also have repercussions in the final weeks of the uncertain election campaign for the White House. The Democratic nominee, Vice-President Kamala Harris, still suffers from disadvantages in the polls compared to Republican rival Donald Trump when at stake is the judgement of who would better handle the challenges of the economy, by far the top of voters' concerns.
