(This story has been updated to add new information.)
The U.S. job market got a big boost in September, with U.S. employers adding 254,000 jobs, according to the Bureau of Labor Statistics.
The bureau said the figure was higher than the average monthly increase of 203,000 cases over the previous 12 months and was the strongest since March. Job growth was driven by the food and beverage industry, health care, government, social assistance, and construction, with the number of new jobs in August exceeding the average economist forecast of 140,000, which was revised upward to 15. The number exceeded 9,000.
The unemployment rate also unexpectedly fell to 4.1% from 4.2% in August.
Economists say the positive report dispels the idea that the Federal Reserve could continue cutting rates aggressively to lift the labor market after the summer employment slump. said. Last month, the Federal Reserve lowered its benchmark federal funds rate by 0.5 percentage point (50 basis points) to a range of 4.75 to 5% from a 23-year high of 5.25 to 5.5% for the first time in more than four years. %. It also plans to reduce it by another 0.5 points by the end of the year.
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“Don’t even talk about a 50 basis point rate cut in November. That’s not on the table,” said Tim McDonough, senior portfolio manager at Key Wealth. “September’s big jobs report…is further evidence that the economy is performing better than expected.”
What industries were hiring in September?
Here are some of the occupations that saw the biggest employment growth in September.
Restaurants: 69,400 additional social assistance: 26,500 additional construction: 25,000 additional local government: 16,000 additional retail: 15,600 additional home health services: 12,700 additional hospitals: 11,500 additional
Some industries that will see job cuts in September:
Temporary Help Services: 13,800 jobs lost Warehousing and Storage: 11,000 jobs lost Transportation Manufacturing: 5,200 jobs lost
Other encouraging details
Here are some of the more encouraging data points from September’s strong jobs report.
Average hourly wages increased 0.4% to $35.36 in September, representing a 4% increase for the year. Both numbers exceeded economic forecasters’ expectations. Restaurants and bars had a great month. The hospitality industry added 69,000 jobs in September, significantly higher than the average monthly increase of 14,000 over the previous 12 months. The unemployment rate for black workers fell to 5.7% in September, down from 6.1% in August. The unemployment rate for Hispanic workers also fell to 5.1% in September from 5.5% in August. On the negative side, the average weekly working hours in September decreased by 0.1 hour to 34.2 hours, and the proportion of people with multiple jobs increased in September. The rate rose to 5.3% from 5.0% the previous month.
How will the jobs report change the Fed’s calculations?
Most economists now expect the Fed to slow its pace and cut rates by an additional 0.5 percentage point at its next meeting on Nov. 6-7, rather than cutting rates another 0.5 percentage point.
“The fundamental health of the labor market remains stronger than initially thought, and private job creation remains strong,” said John Thune, head of equities and markets at Investor’s Edge. “The Fed is in no hurry to cut either rate, as the unemployment rate remains relatively low and still far from the Fed’s forecast of 4.4% to 4.5%.”
Shruti Mishra, Bank of America U.S. economist, said, “Following the much-hyped September jobs report, we have changed our call for the November Fed meeting from a 50 basis point rate cut to a 25 basis point rate cut. It became,โ he said.
Some questioned whether the Fed would cut rates in November.
“If the unemployment rate drops to 4.1%, the word ‘pause’ may return to the Fed’s vocabulary,” McDonough said.
US stock market rises
The S&P 500, the blue-chip Dow index and the tech-heavy Nasdaq all rose after Friday’s strong jobs report, with the S&P 500 index, blue-chip Dow index and tech-heavy Nasdaq index all rising, hoping to erase losses from earlier in the week on tensions in the Middle East and port strikes. That was enough.
The S&P 500 rose 0.9% to 5,751.07 and the Nasdaq Composite rose 1.22% to 18,137.85. The Dow Jones Industrial Average rose 341.16 points, or 0.81%, to close at a record high of 42,352.75.
Many market strategists expect further gains.
“What we have now is a growing economy, a solid if not strong job market, and the Federal Reserve stopping interest rate hikes,” said Chris Zaccarelli, chief investment officer at The Independent. “Not only are they doing so, but they are actually cutting interest rates.” Advisor Alliance. “This is a perfect backdrop to own the stock.”
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Will inflation return?
Inflation has been trending down, giving the Fed the confidence to focus on the other half of its dual mandate: maximum employment. The government cut interest rates aggressively last month to keep the job market strong.
Some economists worry that the Fed was too quick to declare victory over inflation.
Mark Hamrick, senior economic analyst at Bankrate, said that on an annual basis, average hourly wages hit 4.0%, the highest level since May, “outpacing the recent pace of inflation and the loss of money when prices rise.” “This is contributing to the recovery of the purchasing power that has been lost.”
That’s good for workers, but some worry that rising wages and tensions in the Middle East could reignite inflation. Oil prices rose this week for the first time in nearly two years on concerns that escalating attacks between Israel, Lebanon and Iran could disrupt oil supplies.
“The Fed may be concerned about inflation rearing its ugly head as oil prices and average hourly wages rise due to escalating tensions in the Middle East,” said Gina Bolvin, president of Bolvin Wealth Management Group. โ he said. They may return to focus on the “double 50/50 mandate” of stabilizing prices and maximizing employment.
Steve Wyett, chief investment strategist at BOK Financial, said high average hourly wages and “an eye-popping longshoreman wage deal (of 62% pay increases over six years) mean inflation remains an issue for China. “It’s a reminder of what’s possible.” “There are not enough dockworkers relative to the size of the workforce to have a direct impact on overall wage levels, but progress towards the Fed’s 2% target remains slow.”
Contributor: Daniel de Visset
Medora Lee is USA TODAY’s money, markets and personal finance reporter. Please contact us at mjlee@usatoday.com. Subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.