In a surprising turn of events, U.S. employers added 254,000 jobs in September, easing concerns about a slowing labor market and indicating that hiring remains strong enough to support a growing economy.
This figure significantly exceeded economists’ expectations and marked a sharp increase from August’s addition of 159,000 jobs.
Furthermore, the unemployment rate dropped for the second consecutive month, falling from 4.2% in August to 4.1% in September, according to the Labor Department.
Moreover, the Labor Department also revised its estimates for job growth in July and August, adding a combined 72,000 jobs to previous reports. As a result, job growth has averaged a healthy 186,000 over the past three months, a notable increase from the three-month average of 140,000 reported in August.
The job gains in September were broad-based, a positive trend for the economy. Restaurants and bars added 69,000 jobs, healthcare companies increased their workforce by 45,000, government agencies added 31,000, social assistance employers contributed 27,000 jobs, and construction companies hired 25,000 new workers.
A category that encompasses professional and business services also saw a recovery, adding 17,000 jobs after experiencing job losses for three consecutive months.
Average hourly wages also showed solid growth, rising by 0.4% from August, slightly below the previous month’s gain of 0.5%. Year-over-year, hourly wages climbed by 4% in September, up from a 3.9% gain in August.
Meanwhile, the economy’s progress in curbing inflation prompted the Federal Reserve last month to implement a significant half-point cut to its benchmark interest rate—the first reduction in more than four years.
This move aimed to lower borrowing costs to bolster the job market. Following the strong jobs report, economists anticipate that the Fed will likely opt for smaller, quarter-point rate cuts in the future.
Overall, indicators across the economy appear strong. The U.S. economy, the largest in the world, grew at an impressive 3% annual rate from April to June, fueled by robust consumer spending and business investment. As per Federal Reserve Bank of Atlanta, the economy will continue to grow at a healthy annual rate of 2.5% for the recently concluded July-September quarter.
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