US Jobs Report: Worker Anxiety Rises as Job Growth Falls Short of Expectations
US employers added just 29,000 jobs in September, significantly below expectations, while the unemployment rate rose to 4.2%, according to government data released on Friday. This marks a sharp decline from a revised 133,000 jobs added in August. Economists had anticipated an addition of around 90,000 jobs for the month. Revisions to previous data also indicated a reduction of 60,000 jobs in combined payrolls for July and August.
The unemployment rate increased from 4.1% in August, partly due to 485,000 individuals entering the workforce in September, with many not securing jobs immediately. Average hourly wages rose by 3% year-over-year, the smallest increase since May 2021.
Healthcare Hiring Slows as Governments Cut Jobs
The September report revealed a slowdown in hiring across various sectors. Federal, state, and local governments cut 17,000 jobs, while professional and business services companies reduced their payrolls by 9,000. Healthcare companies added 17,000 jobs, which is about half of their average monthly gain of 33,000 over the past year.
Bradley Saunders, an economist at Capital Economics, noted that the slowdown in healthcare hiring may be linked to the Trump administration’s revocation of work authorizations for 350,000 Haitians. Construction companies added 11,000 jobs, and manufacturers increased payrolls by 9,000. Despite low jobless claims, with initial applications for unemployment benefits falling to 197,000, employers’ hiring plans were down 23% year-on-year, marking the lowest total for September since 2011.
Jobs Data Puts Focus Back on Federal Reserve
The weaker hiring figures could prompt the Federal Reserve to reconsider its focus on maximum employment. Several Fed officials have recently emphasized inflation as their primary concern. The US central bank has struggled with inflation remaining above its 2% target for over five years. The latest employment data may influence discussions on whether to maintain or raise interest rates at the Fed’s next meeting.
Despite trade tensions, persistent inflation, and high interest rates, the labor market has shown resilience. However, indicators of worker confidence have declined. The Conference Board’s consumer confidence index fell to its lowest level in over a decade, with more than 28% of respondents expecting fewer job opportunities in the next six months. Glassdoor’s employee confidence index also dropped to its lowest level since its inception in 2016.
Low Hiring, Low Layoffs Define Job Market
Current data reflects a labor market where employers are not significantly reducing their workforce but are also hesitant to hire new employees. The labor department’s measure of gross hiring has remained subdued for over two years. Glassdoor’s Zhao indicated that workers are increasingly reluctant to leave their jobs, fearing that finding new employment may take longer.
The average duration of unemployment has exceeded six months as of August, the longest since February 2022. The September jobs report is the final major employment report before the November 3 US midterm elections, where voters will determine if President Donald Trump’s Republicans maintain control of Congress. Financial markets reacted positively to the jobs data, with futures for the S&P 500 and Nasdaq composite gaining, while the yield on the 10-year Treasury fell to 5.17% from 5.24% the previous day.
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