In a sign that the U.S. economy is still chugging along nicely, job growth blew past expectations in September as payrolls increased by 254,000, the Labor Department reported Friday.
The unemployment rate dropped a tenth of a percentage point to 4.1%, while workers reported pay increases of 4% over the last year, an improvement from the reading a month earlier. Job growth numbers for the previous two months were also revised higher, with an additional 72,000 jobs added to the tally for July and August.
The gains were broad-based, with construction firms hiring 25,000, restaurants and bars 69,000, healthcare companies 45,000 and government agencies 31,000. Manufacturing, however, shed jobs in September, and employment in the sector is down 50,000 from its peak in January.
The September report goes a long way toward alleviating concerns that the economy has been approaching stall speed over the last few months in the late stages of the recovery from the pandemic and its burst of inflation. The numbers suggest the U.S. economy is instead poised to register a rare combination of successful disinflation and continued growth.
"I actually think we are in the mother of all soft landings," Diane Swonk, the chief economist at the accounting firm KPMG, told The New York Times, referring to the elusive combination. "The labor market is apparently not cooling as rapidly as we thought."
Gregory Daco, chief economist at EY-Parthenon, deployed the same metaphor: "It puts another set of wheels under the plane in terms of assuring a soft landing," he said, per The Wall Street Journal.
The results will likely be welcome news at the Federal Reserve, which announced an unusually large interest rate cut of 50 basis points at its most recent meeting amid concerns that the economy could be headed for a recession. Analysts now expect to see smaller cuts at its next meeting and over the rest of the year. The odds of a 25-basis-point cut in November rose to 98% on Friday, according to the CME FedWatch Tool.
Biden celebrates: Making his first appearance at the White House press briefing, President Biden touted the day’s good economic news, which also included the resolution of a strike by dockworkers in the eastern half of the country.
"With today’s report, we’ve created 16 million jobs, unemployment remains low, and wages are growing faster than prices," Biden said in his prepared remarks. "Under my administration, unemployment has been the lowest in 50 years, a record 19 million new businesses have been created, and inflation and interest rates are falling."
Not everyone was celebrating, though, as Republican Sen. Marco Rubio accused the White House without evidence that the job numbers were fictitious. "Another fake jobs report out from Biden-Harris government today," he said on social media, citing downward revisions of previous reports.
Asked about Rubio’s comment, Biden rejected the claim as purely political. "If you notice anything MAGA Republicans don’t like, they call fake," he told reporters. "Anything. The job numbers are what the job numbers are, they’re real."
Moody’s chief economy Mark Zandi said the data is consistent with a host of other positive economic signals he has seen. "The jobs report for September cements my view that the economy is about as good as it gets," he wrote on social media. "The economy is creating lots of jobs across many industries, consistent with robust labor force growth, and thus low and stable unemployment. The economy is at full-employment, no more and no less. Wage growth is strong, and given big productivity gains, it is consistent with low and stable inflation. One couldn’t paint a prettier picture of the job market and broader economy."
