US hiring soars past expectations in sign of resilient market

WASHINGTON - Hiring in the US picked up significantly more than expected in September, while the jobless rate crept lower, according to government data released on Oct 4, offering relief to policymakers ahead of November’s election.

The world’s biggest economy added 254,000 jobs in September, the Department of Labour said. This was markedly higher than August’s 159,000 figure, which was also revised upwards.

A consensus estimate by Dow Jones had expected growth of 150,000.

The unemployment rate dipped from 4.2 per cent to 4.1 per cent, the report added.

The health of the job market has come into focus over recent months as high interest rates bite – but the pickup in hiring should assuage concerns that the Federal Reserve waited too long to slash rates in September, risking a downturn.

Economic issues are also among the most important for voters ahead of the Nov 5 presidential election, as households grapple with higher costs of living following high inflation during the Covid-19 pandemic.

The Fed had rapidly hiked the benchmark lending rate in 2022 to ease demand and tamp down surging inflation.

Price increases have eased in recent times, allowing the central bank to begin rate reductions.

As for wages, average hourly earnings in September were up 0.4 per cent from a month ago to US$35.36 (S$46.10), slightly above expectations.

From a year ago, wages have risen by 4 per cent, the report noted.

The Fed’s half percentage point rate cut in September was “unusually large”, according to Mr Dan North, senior economist at Allianz Trade North America.

“It’s most likely that the Fed cut so much because it felt that it had fallen behind in its mission to balance employment and inflation,” he told AFP.

The stronger-than-expected report on Oct 4 might mean the

Fed can take a more gradual path to rate cuts,

given that the economy appears to be holding up.

On Oct 4, the Labour Department noted that “employment continued to trend up” in areas such as food services, healthcare, government and construction.

But economist Nancy Vanden Houten from Oxford Economics warned that even though a strike by Boeing workers did not affect September’s employment data much, it could weigh on job growth if it persists through mid-October.

About 33,000 workers in the Pacific North-west region walked off the job on Sept 13, effectively shutting down assembly plants for the 737 Max and 777 aircraft after overwhelmingly voting down a contract offer.

“Hurricane Helene may also weigh on job growth in October,” Ms Houten added.

The US economy is also staring down new and potentially damaging crises, with tensions flaring in the Middle East and several states grappling with the fallout from a devastating hurricane.

The events hit just as American policymakers were gaining confidence that they had successfully tamed inflation without pushing the economy into a recession, and as polls and consumer surveys suggest that Americans’ sour economic mood had begun to improve. But, in just a week, new risks have emerged.

The economy now faces the prospect of an oil price spike and the aftermath of a storm that could inflict more than US$100 billion in damage upon large swathes of the South-east. AFP, NYTIMES