336,000 jobs stun officials
Economy is `on fire,' with September hiring almost double what experts had expected
In a sign of continued economic stamina, American payrolls grew by 336,000 in September on a seasonally adjusted basis, the Labor Department said Friday.
The increase, almost double what economists had forecast, confirmed the labor market's vitality and the overall hardiness of an economy facing challenges from a variety of forces.
It was the 33rd consecutive month of job growth, and the increase was the biggest since January.
The unemployment rate, based on a survey of households, was steady at 3.8%. It has been below 4% for nearly two years, a stretch not achieved since the late 1960s.
“This is an economy on fire,” said Samuel Rines, an economist and the managing director at
Corbu, a financial research firm.
Hiring figures for July and August were revised upward, showing 119,000 more jobs than previously recorded. Taken together, the gains reflected confidence among employers that the economic recovery has plenty of room left to run.
“Fears of an imminent recession have been easing since the spring, allowing businesses to revisit hiring plans they put on hold,” said Andrew Flowers, a labor economist at Appcast, a firm that helps companies with online recruiting efforts.
The figures were being closely watched for signals of the next move by Federal Reserve policymakers, who have tried to rein in both wages and prices by pulling up interest rates. Because further rate increases can negatively affect stock and bond prices, robust job numbers often cause a sell-off among investors.
The market reaction was generally positive Friday, largely because the report showed an economy still growing while wage growth moderates, leading many to believe the Fed will keep rates steady. Average hourly earnings for workers rose 0.2% from the previous month and 4.2% from September 2022. While solid, the increase was smaller than anticipated, and the one-year pace was the slowest since March 2020.
“I don't think the headline jobs number necessarily means an inflationary impulse because average hourly earnings gains are going down,” said David Cervantes, the founder of Pine Brook Capital Management, an asset management firm. For those worried about the extent to which higher wages may still be contributing to inflation, he said, this month's number should provide some ease.
Biden administration officials celebrated the report as unambiguously positive.
“Simply put, good news is good news, full stop,” said Jared Bernstein, chair of the White House Council of Economic Advisers. “Every economy has its headwinds, but the Bidenomics job market has been a strong, persistent tail wind.”
The economy's staying power, more than three years into the recovery from COVID-19 pandemic shutdowns, can be seen in many ways. Inflation-adjusted economic growth accelerated over the summer as overall price increases slowed to a third of their pace a year ago. Spending has eased from the breakneck speed of 2021, yet demand for travel, hospitality and event tickets remains high. Jobless claims are hovering at February 2020 lows.
The extra savings Americans accumulated during the pandemic have lasted longer than expected. At the end of 2019, U.S. households held roughly $980 billion in “checkable deposits” — including checking, savings and money market accounts that are easily cashable. In 2023, that figure is over $4 trillion.