US adds 156,000 jobs as labour market shows signs of resilience

People carrying resumes speak with potential employers at a job fair on Sept 13, 2016, in Hartford, Connecticut.
People carrying resumes speak with potential employers at a job fair on Sept 13, 2016, in Hartford, Connecticut. PHOTO: AFP

WASHINGTON • Employers continued to add to payrolls last month as people streamed into the workforce and most found jobs amid record openings, indicating the US labour market is settling into a pace that will support the economy.

The 156,000 increase followed a 167,000 rise in August, a Labour Department report showed yesterday. The jobless rate was 5 per cent as the labour participation rate ticked up.

While payroll additions have slowed from last year, they are still above what economists say is needed to accommodate labour force growth, as employers face a limited pool of available and qualified workers. Steady progress will underpin further wage gains and consumer spending, the main driver of US expansion this year, and encourage Federal Reserve policymakers to follow through on their forecast for an interest-rate increase by the year end.

"The job market continues to move forward," said Mr Ryan Sweet, an economist at Moody's Analytics. "The unemployment rate rose for all the right reasons. We got some acceleration in wage growth in September but we'd love to see much stronger gains."

Yesterday's employment report will be the last before the Fed's Nov 1-2 policy meeting. US Fed chair 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 Dr Yellen has described as "unsustainable".

Investors see almost no chance of a rate increase at that meeting, given how close it is to the Nov 8 presidential election.

The labour market is playing a key role in the race for the White House. Republican presidential nominee Donald Trump has focused on job losses in manufacturing that he attributes to failed trade deals. Democratic candidate Hillary Clinton has acknowledged Americans' worries about declines at factories, while defending President Barack Obama's record in helping the economy heal after the 2009 financial crisis.

Payrolls at factories fell by 13,000, after a 16,000 drop in the previous month, while construction jobs rose by 23,000. Retailers increased payrolls by 22,000. Employment in leisure and hospitality rose 15,000, the smallest in four months.

Wages showed less of a pickup than projected, as a sustained acceleration has been elusive in the current expansion that began in mid-2009. Average hourly earnings rose by 0.2 per cent from the prior month. Worker pay increased 2.6 per cent over the 12 months ended in September, following a 2.4 per cent gain in the prior month.

BLOOMBERG, REUTERS

A version of this article appeared in the print edition of The Straits Times on October 08, 2016, with the headline 'US adds 156,000 jobs as labour market shows signs of resilience'. Print Edition | Subscribe