U.S. Employers Add 254,000 Jobs, Far Surpassing Forecasts

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Jobs Report Live Updates: U.S. Employers Add 254,000 Jobs, Far Surpassing Forecasts

Talmon Joseph Smith
5–6 minutes

WASHINGTON - Despite all the hand-wringing, the U.S. labor market remains impressively strong.

Businesses reported adding 254,000 jobs in September, the government reported on Friday. The number far surpassed forecasts and was the strongest monthly gain since March.

The unemployment rate declined to 4.1 percent, from 4.2 percent.

The strong growth follows months of slower hiring and bolstered odds that the U.S. economy can avoid losing momentum. The report eased analysts’ concerns that based on historical trends, a recession could be looming.

Real-time estimates of overall economic growth remain strong. Productivity is robust. Household and corporate balance sheets are healthy overall. Retail sales are still solid. And interest rates, though still high, have recently fallen.

Here’s what else to know about the report:

The job gains were widespread: Employment in food services and drinking places surged in September, growing by 69,000. Health care added 45,000 jobs. and government jobs increased by 31,000. Construction employment, with a gain of 25,000, also continued its upward swing.

Recent months look stronger: Summer was not so bad after all. The employment numbers for July and August were revised upward by a total of 72,000 jobs.

Pay gains remain robust: Average hourly earnings for workers were better than expected, growing at 0.4 percent on a monthly basis, and 4 percent over the past 12 months. With overall inflation slowing, that is welcome news for households that have been frustrated in recent years by price increases.

A snapshot without disruptions: The report is based on a survey by the Bureau of Labor Statistics taken before several major disruptions — including Hurricane Helene and the continuing strike at Boeing — that are likely to make the underlying trends in the labor market harder to tease out in the near term.

A close look from the Fed: There will be one more monthly jobs report before Federal Reserve policymakers meet in early November. But that data, for October, is likely to be skewed by the hurricane disaster and the strike. So the Fed may put greater emphasis on the September report. Officials will welcome this resurgent data — though markets now expect that this may also cause them to reduce interest rates at a slower pace.

How the markets reacted: Traders reacted positively, with the S&P 500 rising in early trading. Treasury yields, which are indicative of the government’s borrowing costs, jumped higher as investors bet on less aggressive rate cuts by the Fed.

What the economists say: “It’s an incredible number,” said Diane Swonk, the chief economist at KPMG. “The labor market is apparently not cooling as rapidly as we thought. It’s either the most magnificent soft landing we have ever achieved or there is going to be some further consternation about how sustained this can be.”