Evelyn Reynolds

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The September jobs report was surprisingly strong, and the details show that growth came from many different areas of the economy.
The biggest contributions came from leisure and hospitality, with 78,000 new positions, and health care and social assistance, at 71,700. If private education was added to the health-care group, as some economists do, that category would have been the biggest growth area of the month.

Within hospitality, food services and drinking places saw jobs jump by 69,000. That is a notable increase from the average monthly gain of 14,000 over the past year, according to the Bureau of Labor Statistics.
Government and construction were also bright spots, adding 31,000 and 25,000 jobs, respectively. Professional and business services grew by 17,000 jobs, which is a notable change for a category that had shed jobs in recent months.
LPL Financial’s chief economist, Jeffrey Roach, said in a note to clients that the report showed “fairly broad-based” job growth, but did highlight that the percent of workers holding multiple jobs rose 5.3%.
“This solid report increases the odds that the economy will continue to grow above trend in the next quarter. … The only caution flag could be the rise in those with multiple jobs,” Roach said.
Two key areas that lost jobs last month were manufacturing and transportation and warehousing, though each category shrank by fewer than 10,000 jobs.

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Black and Hispanic workers experienced a decline in unemployment, while the rate held steady for Asian workers.
The jobless rate fell significantly for both Black and Hispanic men.
The labor force participation rate rose for Black workers, while slipping for Asian and Hispanic workers

Job seekers attend the JobNewsUSA.com South Florida Job Fair held at the Amerant Bank Arena in Sunrise, Florida, on June 26, 2024.
Joe Raedle | Getty Images

The unemployment rate for men in Black and Hispanic racial groups declined in September while staying little-changed for other racial groups, according to data released Friday by the Department of Labor.
In September, Black men saw their jobless rate fall to 5.1% from 5.9% in the month prior. The jobless rate similarly fell for Hispanic men to 4.1% from 4.8% last month.

The overall unemployment rate inched lower to 4.1% in September, down just 0.1 percentage point from August.

“The Black unemployment rate is still 1.5 times that of white workers, but it edged down in September to the lowest level since April,” said Bankrate economic analyst Sarah Foster. “Black unemployment typically holds about two times higher than White unemployment, among the first to be laid off. Meanwhile, the unemployment rate for Hispanic workers hit the lowest since June.”
This marks the first fall in unemployment for Black workers in five months, Foster added.
Meanwhile, the jobless rates for other racial groups remained little changed or fell slightly. Unemployment for Asian workers held steady at 4.1%. For white workers, it inched down to 3.6% from 3.8% in September.
The jobless rate for women across racial groups recorded small declines. Black and Hispanic women both experienced a 0.2% drop in unemployment in September to 5.3% and 4.8%, respectively. Unemployment for white women also ticked lower to 3.1% from 3.4%. The jobless rates for Asian workers separated by gender were not readily available.

The employment-to-population ratio for female prime-age workers, or those ages 25 to 54, fell to its lowest level since May.
“Prime-age labor force participation still remains near a historic high despite ticking down from its recent record-setting high in August,” said Foster.
Last month, the labor force participation rate — the percentage of the population that is either employed or actively seeking work — was unchanged at 62.7%.

Among white workers, the rate inched up just 0.1 percentage point to 62.4%, while it fell to 67.4% from 67.8% for Hispanic workers. Among Asian workers, participation slipped to 65.3% from 65.5%, and rose among Black workers to 62.9% from 62.7%.
— CNBC’s Gabriel Cortes contributed to this report.

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Nonfarm payrolls surged by 254,000 in September, up from a revised 159,000 in August and better than the 150,000 Dow Jones consensus forecast.
The unemployment rate fell to 4.1%, down 0.1 percentage point as the survey of household employment showed an even stronger picture, with a gain of 430,000.
Average hourly earnings increased 0.4% on the month and were up 4% from a year ago. Both figures were ahead of respective estimates.

The U.S. economy added far more jobs than expected in September, pointing to a vital employment picture as the unemployment rate edged lower, the Labor Department reported Friday.
Nonfarm payrolls surged by 254,000 for the month, up from a revised 159,000 in August and better than the 150,000 Dow Jones consensus forecast. The unemployment rate fell to 4.1%, down 0.1 percentage point.

With upward revisions from previous months, the report eases concerns about the state of the labor market and likely locks in the Federal Reserve to a more gradual pace of interest rate reductions. August’s total was revised up by 17,000 while July saw a much larger addition of 55,000, taking the monthly growth up to 144,000.
Strength in job creation spilled over to wages, as average hourly earnings increased 0.4% on the month and were up 4% from a year ago. Both figures were ahead of respective estimates for gains of 0.3% and 3.8%. The average work week nudged lower to 34.2 hours, down 0.1 hour.

“It was ‘wow’ across the board, much stronger than expected,” Kathy Jones, chief fixed income strategist at Charles Schwab, said of the report. “The bottom line is it was a very good report. You get upward revisions and it tells you the job market continues to be healthy, and that means the economy is healthy.”
Stock market futures added to gains following the report while Treasury yields moved sharply higher.
Restaurants and bars led job creation for the month, with the hospitality industry adding 69,000 positions in September after averaging just 14,000 over the previous 12 months.

Health care, a consistent leader in job growth, contributed 45,000, while government grew by 31,000. Other gainers included social assistance (27,000) and construction (25,000).
A more encompassing measure of unemployment that includes discouraged workers and those holding part-time jobs for economic reasons dropped to 7.7%. The share of the workforce either working or looking for work, known as the labor force participation rate, held steady at 62.7%.

The survey of household employment, which is used to calculate the unemployment rate, showed an even stronger picture, with a gain of 430,000 as the employment-to-population ratio increasing to 60.2%, an increase of 0.2 percentage point.
Job creation tilted strongly to full-time positions, which were up 414,000, while those reporting part-time work fell by 95,000.
Futures market pricing shifted sharply after the report, with traders now assigning a strong chance of consecutive quarter percentage point interest rate cuts from the Federal Reserve in November and December.
The report comes with questions over the labor market’s strength and how that will impact the Fed’s approach to lowering interest rates.
Earlier this week, Fed Chair Jerome Powell characterized the jobs picture as “solid” but said it has “clearly cooled” over the past year.
There have been scant signs of a stepped-up pace of layoffs, as new claims for unemployment benefits have held steady but hiring rates have cooled. Business surveys, including the Fed’s own “Beige Book” summary of business conditions, indicate that companies are holding head counts fairly steady.
Powell and other Fed officials have indicated a willingness to continue lowering interest rates following last month’s half percentage point cut in the overnight borrowing level. However, there’s considerable debate within the market about how quickly the central bank will move, and Powell said Monday he expects the Fed to move in quarter-point increments at least through the end of the year. More

September’s jobs picture is expected to look a lot like August’s — a gradual slowdown in hiring and a modest increase in wages.
Markets will be watching the report closely for indications as to whether the Fed will be able to loosen policy and lower interest rates in a gradual manner.
For the past several months, labor market indicators have been trending lower, though far from off a cliff.

Attendees at the Albany Job Fair in Latham, New York, US, on Wednesday, Oct. 2, 2024. 
Angus Mordant | Bloomberg | Getty Images

September’s jobs picture is expected to look a lot like August’s — a gradual slowdown in hiring from earlier this year, a modest increase in wages and a labor market that is looking a lot like many policymakers had hoped it would.
Nonfarm payrolls are projected to show growth of 150,000, from 142,000 the month before, with a steady unemployment rate of 4.2%, according to the Dow Jones consensus. On the wage side, the forecast is for a 0.3% monthly gain and a 3.8% increase from a year ago — the annual rate being the same as August.

Should the numbers come in as expected, they would hit close to a sweet spot allowing the Federal Reserve to continue to lower interest rates without a sense of urgency that it could be behind the curve and at risk of causing a recession.
“The jobs market is slowing down and becoming less tight,” said Katie Nixon, chief investment officer at Northern Trust Wealth Management. “The balance of power has shifted back to employers and away from employees, and that certainly will alleviate the wage pressure, which has been a key component of inflation. We’ve been team soft-landing for a while, and this is exactly what a soft landing looks like.”
Of course, there’s always the possibility of a substantial upside or downside surprise to the numbers. Then there are the monthly revisions that have been dramatic at times, causing the Labor Department to overcount hiring by more than 800,000 for the 12-month period through March 2024, adding uncertainty to jobs market analysis.

“While we’re looking at 150,000 jobs added, I would not be surprised if it comes in at 50,000 and I would not be surprised if it comes in at 250,000,” said David Kelly, chief global strategist at JPMorgan Asset Management. “I don’t think people should get too freaked out either way about this number.”
The Bureau of Labor Statistics will release the report at 8:30 a.m. While there will still be one more nonfarm payrolls count before the presidential vote next month, the October report is expected to be distorted by the dock workers’ strike as well as Hurricane Helene — making September the last “clean” report before Election Day.

Looking for clues

Still, markets will in fact be watching the report closely.
Specifically, they’ll be looking for indications as to whether the Fed will be able to loosen policy and lower interest rates in a gradual manner more in keeping with prior easing cycles, or will have to repeat the dramatic half percentage point interest rate cut it implemented in September.
At the same meeting where they approved the reduction, policymakers indicated another half percentage point, or 50 basis points, in cuts before the end of 2024 and another full percentage point in 2025. Markets, though, are pricing in a more aggressive schedule.
“A strong number wouldn’t really change their position,” JPMorgan’s Kelly said. “A weak number could tempt them to another 50 basis points.”
However, Kelly said the Fed is more likely to look at the employment picture as a “mosaic” rather than just an individual data point.

The bigger picture

For the past several months, labor market indicators have been trending lower, though far from falling off a cliff. Manufacturing and services sector surveys have pointed to slower hiring, while Fed Chair Jerome Powell earlier this week characterized the labor market as solid but softening.
Excluding a brief slump at the onset of the Covid pandemic, the last time the monthly hiring rate was the level seen this summer — 3.3% of the labor force in both June and August — was in October 2013 when the unemployment rate was 7.2%, according to Labor Department data.
Job openings also have fallen and pushed the ratio of available positions to unemployed workers down to 1.1 to 1, from 2 to 1 just a couple years ago.
However, a kind of stasis has hit a labor market that not that long ago was wrestling with the “Great Resignation” as workers confident they could find better deals elsewhere left their jobs en masse.
Excluding the pandemic gyrations in 2020, the quits rate hasn’t been lower than its current 1.9% since December 2014, while the separations rate, even including Covid, was last lower than the current 3.1% in December 2012.
“Whatever leverage labor had, [it] has dissipated or just eased as the economy’s normalized,” said Joseph Brusuelas, chief economist at tax consultancy RSM. “So we’re going to have a lot less turnover. We’re seeing it in our business. We’re hearing it from our clients.”
Still, had someone told Brusuelas back during the Covid tumult four years ago that the economy would be adding nearly 150,000 jobs a month now with an unemployment rate in the low 4% range, he said, “I’d have bought you a steak dinner.” More