Strong Number for the Employment Sector by Tim McLaughlin
An unexpectedly surge in hiring pushed unemployment to a six year low of 5.9% in September as the U.S. labor market showed renewed vigor.
The 248,000 gain in payrolls last month followed a bigger than previously reported 180,000 increase in August, the Labor Department reported Friday. The median forecast of economists in a Bloomberg survey called for a 215,000 advance. The jobless rate fell to the lowest level since July 2008, from 6.1%.
“This report was strong across the board,” said Dean Maki, chief U.S. economist at Barclays PLC in New York and the top payrolls forecaster according to data compiled by Bloomberg. “The labor market continues to grow fast enough to keep pushing the unemployment rate down.”
Sustained, elevated gains in hiring are needed to bring about faster wage growth and employment opportunities. Federal Reserve policy makers are trying to determine the extent of labor market slack as the central bank approaches the end of asset purchases aimed at boosting growth.
Estimates in the Bloomberg survey of 100 economists ranged from gains of 155,000 to 265,000 after a previously reported 142,000 advance. Revisions to prior reports added 69,000 jobs to payrolls in the previous two months.
The unemployment rate, which is derived from a Labor Department survey of households, was projected to hold at 6.1%, according to the survey median.
The participation rate, which measures the number of Americans employed or looking for a job as a share of the working age population, decreased to 62.7%, the lowest since February 1978, from 62.8% a month before.
Employment at private service providers increased 207,000, while payrolls rose by 4,000 at factories. Construction companies added 16,000 workers for a second month and retail employment grew by 35,300 last month.
While unemployment is falling and more people are finding work, Fed policy makers are monitoring other indicators, such as the underemployment rate and worker pay, to gauge labor market strength.
Policy makers in September stuck to their pledge to keep interest rates near zero for a “considerable time” after the Fed stops buying assets. The Fed tapered monthly bond buying to $15 billion in their seventh consecutive $10 billion cut, staying on course to end the purchase program this month.
“There are still too many people who want jobs but cannot find them, too many who are working part time but would prefer full- time work,” Fed Chair Janet Yellen said during a Sept. 17 press conference in Washington after the central bank’s last policy meeting. That “significant underutilization of labor resources” is keeping a lid on wages, she said.
