US Jobs Growth Slowed in September, Fed Very Cautious Now

US Jobs Growth Slowed in September, Fed Very Cautious Now

US Jobs Growth Slowed in September, Fed Very Cautious Now

US employment growth slowed for the 3rd month in September and the jobless rate rose, which could make the Federal Reserve more cautious about raising interest rates.

Nonfarm payrolls rose 156,000, down from a gain of 167,000 jobs in August, the US Labor Department said Friday, while the unemployment rate ticked up 1/10% to 5.0 percent as more Americans rejoined the labor force.

The data suggested the economy was on firm ground, but not growing so swiftly as to knock the US Fed off its game plan of raising borrowing costs only gradually.

It is an economy that is doing OK. It is not necessarily accelerating, but it’s certainly doing OK

On balance, the job market continues to improve, which could be an asset for Democratic presidential candidate Hillary Clinton in the November US election. She has argued that the Obama administration’s policies have helped the economy create millions of jobs.

US stocks were slightly lower in early trading. The US slipped against a basket of currencies, suggesting traders were scaling back rate-hike bets. Rate futures, however, continued to point to an increase at the Fed’s December policy meeting.

Fed Chairman Janet Yellen has said the economy needs to create less than 100,000 jobs a month to keep up with population growth. Average monthly job gains have been about 180,000 this year, which Ms. Yellen has described as “Unsustainable.”

Economists polled had expected employers to add 175,000 jobs last month, with the jobless rate holding steady. The government said 7,000 fewer jobs were created in August and July than had been previously reported.

Hourly wages for private sector workers rose 2.6% in September from the same month a year earlier, in line with expectations. Wage growth has shown signs of accelerating over the last year although it remains slower than before the 2007-2009 recession.

The employment report will be the last before the Fed’s next policy meeting on 1-2 November. Investors see virtually no chance of a rate increase at that meeting given how close it is to the election.

Schoolmarm Yellen said last month that the Fed will likely raise rates once this year. It lifted its benchmark overnight rate at the end of last year for the 1st time in nearly a decade, but has held it steady this year amid concerns over persistently low inflation.

GOP Presidential candidate Donald Trump accused the US central bank of playing politics by holding rates low, a charge Ms. Yellen and other Fed policymakers have denied.

Donald Trump has made reversing job losses at US factories a central campaign promise. Manufacturing employment fell by 13,000 jobs in September and the sector has shed jobs in 3 of the last 5 months.

In a statement Friday, a senior economic adviser to Donald Trump, said the economy continued to fall short in terms of “growth, income, trade and jobs.”

“Americans desperately need more jobs and new economic policies, not the same-old, same-old offered by Hillary Clinton’s campaign,” he said.

A top Obama White House economic adviser said the data showed the economy on a good path.

“We’re seeing exactly what we want to see in the economy, which is continued steady job growth, it brings people back (into the labor force), that’s driving up wages, and that’s a good thing,” he said.

The slowdown in the labor market last month was spread widely, with transportation and warehousing shedding 9,000 jobs and the healthcare and social assistance sector adding only 21,800 jobs, down from 45,300 a month earlier

Have a terrific weekend.

 

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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