U.S. adds fewer jobs than expected in September
U.S. employers added fewer jobs than expected in September and wage gains slowed, adding to evidence of decelerating growth in the domestic economy. But in a sign of a still-tight labor market, the unemployment rate unexpectedly declined to a fresh five-decade low of 3.5%.
Wage gains missed expectations on both a monthly and annual basis, remaining flat between August and September. Over last year, average hourly earnings rose just 2.9%, marking the slowest pace of increases since July 2018. Employment changes in manufacturing turned negative in September, consistent with a recent contraction reported in manufacturing sector activity. The sector lost 2,000 payrolls during the month, versus a tepid gain of 3,000 expected.
“The decline in the unemployment rate to 3.5%, the lowest since December 1969, from 3.7%, was for all the right reasons – with a very strong 391,000 gain in the household survey measure of employment easily outpacing the 117,000 increase in the labor force,” Paul Ashworth, chief U.S. economist for Capital Economics, wrote in a note Friday.
On the positive side, weekly unemployment claims remained low, and the Conference Board’s labor market differential – which represents the difference between the percentage of consumers who say jobs are plentiful and the percentage saying jobs are hard to find – remained relatively high at 33.2 in September, suggesting the labor market remained tight.
This week, stocks were whipsawed after the Institute of Supply Management released two separate reports showing that both manufacturing and service sector activity fell to multi-year lows in September.
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