US job growth slowed in September, still solid

The US added 263,000 nonfarm jobs in September, a sign Federal Reserve monetary tightening is slowing demand, even as the latest job numbers suggest the labor market remains solid.

The latest data compares with average analysts' estimates of about 250,000 jobs for the month and follows job growth of 315,000 in August. Job growth so far this year has averaged 420,000 a month, compared with 562,000 a month in 2021, according to the Bureau of Labor Statistics.

"The trend has clearly slowed this year, but job growth remains very rapid, thanks presumably to continued post-Covid catch-up hiring," said Pantheon Macroecnomics chief economist Ian Shepherdson, adding that the report "just about nails on" another 75 basis point Fed rate hike at the November meeting.

The unemployment rate fell back to 3.5pc, a five-decade low, from 3.7pc, a sign the labor market remains tight.

The Federal Reserve has embarked on its steepest monetary tightening since the 1980's, bringing its target rate up to 3-3.25pc last month from near zero at the beginning of March as it seeks to quash annual inflation running at 8.3pc in August, largely driven by spiking energy prices in the wake of the war in Ukraine and ongoing supply chain snags related to Covid-19.

The Fed has said its focus is bringing down inflation, even at the cost of "pain" for businesses and consumers that might mean job losses and could even lead to recession. The US economy contracted in the first two quarters of the year, signaling a "technical recession," even as the official recession-dating committee adheres to other criteria and the still-robust labor market confounds many economists in making that determination.

Average hourly earnings increased by 5pc over the past 12 months.

Notable job gains occurred in leisure and hospitality and in health care.

Manufacturing employment rose by 22,000, with auto and autoparts jobs up by 8,000, and fabricated metal products up by 6,000. Manufacturing has added an average of 36,000/month this year. Mining and logging — which includes the oil and gas extraction industries — added 3,000 jobs after losing 3,000 jobs the prior month.

Transportation and warehousing lost 7,900 jobs after adding 5,400 jobs the month prior.

By Robert Willis