Payrolls Rise By 263,000, As Job Market Stays Strong In America

America’s unemployment rate was 3.5%, however has tumbled down to 0.2 rate point as the workforce participation rate edged lower.

Average hourly income rose 5% from a year ago, somewhat underneath the estimate.
Leisure and hospitality, medical care and business and expert services drove sector gainers.

Job growth missed the mark regarding assumptions in September and the joblessness rate declined despite efforts by the Central bank to slow the economy, as per the U.S Labor Department.

Nonfarm payrolls increased 263,000 for the month, compared to the Dow Jones estimate of 275,000.

The joblessness rate was 3.5% versus the conjecture of 3.7% as the workforce support rate edged lower to 62.3% and the size of the workforce reduced by 57,000.

A more encompassing measure that includes discouraged workers and those holding part-time jobs for economic reasons saw an even sharper decline, to 6.7% from 7%.

September’s payroll figure marked a deceleration from the 315,000 gain in August and tied for the lowest monthly increase since April 2021.

Stock market futures moved lower after the release while government bond yields rose. Investors were looking at the numbers for an indication of how the Federal Reserve will react as it tries to tamp down inflation.

In the closely watched wage numbers, average hourly earnings rose 0.3% on the month, in line with estimates, and 5% from a year ago, an increase that is still well above the pre-pandemic norm but 0.1 percentage point below the forecast.

Some other place, health care added 60,000, professional and business services rose 46,000 and manufacturing contributed 22,000. Construction was up 19,000 and wholesale trade climbed 11,000.

A drop of 25,000 in government occupations was a major supporter of the report missing assumptions. Hiring at the state and local level is highly seasonal, so the decline points to a report that otherwise was largely in line with expectations and shows a resilient jobs market.

Also on the negative side, financial activities and transportation and warehousing both saw losses of 8,000 jobs.

The report “simply shows that the customer and corporate side have been extremely strong notwithstanding the headwinds of the Russia-Ukraine war, increasing interest rates and easing back housing market.

The report comes amid a months long Fed effort to bring down inflation running near its highest annual rate in more than 40 years. The central bank has raised rates five times this year for a total of 3 percentage points and is expected to continue hiking through at least the end of the year.

Unemployment Is A Recipe For Mental Dazedness!

Despite the increases, job growth had remained relatively strong as companies face a massive mismatch between supply and demand that has left about 1.7 job openings for every available worker. That in turn has helped drive up wages, though the increase in average hourly earnings has fallen well short of the inflation rate, which most recently was at 8.3%.

Federal Open Market Committee members in September indicated they expect the unemployment rate to rise to 4.4% in 2023 and hold around that level before dropping down to 4% over the long run.

Markets widely expect the Fed to continue the pace of its rate hikes with another 0.75 percentage point increase in November. Traders assigned an 82% chance of a three-quarter point move following the jobs numbers, and expect another half-point increase in December that would take the federal funds rate to a range of 4.25%-4.5%.

Credit: CNBC