The nation’s employers added 336,000 jobs in September, an unexpectedly strong increase that suggests many companies remain confident enough to keep hiring despite high interest rates and a confusing outlook for the economy.
Friday’s report from the Labor Department showed that hiring last month jumped from an increase of 227,000 in August, which was revised sharply upward. July hiring was also healthier than initially estimated. The economy has added a healthy average of 266,000 jobs a month over the past three months.
The unemployment rate remained unchanged at 3.8%.
The labor market has defied a number of threats this year, notably high inflation and the Federal Reserve’s rapid series of interest rate increases aimed at conquering it. Although the Fed’s increases have made borrowing much more expensive, steady job growth has helped boost consumer spending and kept the economy growing.
The September hiring report comes at a time when the Federal Reserve is examining every incoming economic data to decide whether it needs to raise its benchmark rate once again this year or simply leave it elevated well into 2024.
Job growth has remained resilient for most of the past two and a half years, even after high inflation broke out and the Federal Reserve raised interest rates at the fastest pace in four decades.
However, additional threats to the economy have emerged in recent weeks, including much higher long-term interest rates, rising energy prices, resumption of student loan payments, expanding labor strikes and the constant threat of a government shutdown.
The labor market has been so strong for so long that a slowdown, as long as it is gradual, would keep it at healthy levels. The number of Americans filing for unemployment benefits, which tends to keep pace with layoffs, has remained persistently low. Many companies are reluctant to lay off workers after struggling to rehire staff after the 2020 pandemic recession ended a rapid and strong recovery.
And surveys by the Institute for Supply Management, a trade group of purchasing managers, found that both manufacturing and service companies continued to add jobs last month. According to the ISM, among banks, restaurants, retailers and other service sector companies, hiring accelerated in September compared to August.
The Federal Reserve’s benchmark rate is at a 22-year high of about 5.4% after 11 increases starting in March 2022. The central bank’s rate hikes have led to much higher borrowing costs for borrowers. consumers and businesses throughout the economy.
(With information from The Associated Press)