The U.S. added more jobs in September than most expected, with both the retail trade and transportation sectors significantly padding their payrolls.
On Friday, the U.S. Labor Department reported a 336,000 increase in last month’s nonfarm payrolls, according to seasonally adjusted data. This number nearly doubles the Dow Jones consensus estimate of 170,000 and suggests the economy is in good shape, despite the dysfunction in Washington and stubbornly interest rates. And while the entertainment industry’s writers’ strike is over, now the United Auto Workers union is disrupting the a key national sector.
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Employment in retail trade rose by 19,700 jobs. Elsewhere, truck transportation added 9,000 jobs, following a decline of 25,000 in August when trucking giant Yellow Corp. collapsed.
For now, the unemployment rate is holding steady at 3.8 percent. But more layoffs could be on the horizon as many companies cut jobs in the fourth quarter when preparing budgets for the year to come.
Flexport came out of the gate last week with plans to eliminate up to 30 percent of staff by the end of the month.
Macy’s and Target as well as UPS plan to hire tens of thousands of season workers, some of whom could eventually become permanent.
September’s data also shows that the labor force is still growing—job openings rose to 9.6 million—but average hourly earnings rose just 0.2 percent for the second month in a row. That brings the year-over-year pace down to 4.2 percent, Wells Fargo Securities economists said. This means the Federal Reserve could raise interest rates again this year to try to manage inflation, they added.
Selcuk Eren, senior economist for The Conference Board, said the payroll increase suggests the “labor market is stronger than previously thought.” He expects the Fed to increase rates one more time, possibly next month. But keeping interest rates high longer will eventually trigger a “short but shallow recession,” Eren said.
The leisure and hospitality industries powered the payroll gains, adding 96,000 jobs. Eren noted that foreign workers continue finding jobs in construction, transportation and warehousing and retail trade. Meanwhile, “payrolls for U.S. born workers are only back at its prepandemic level,” Eren said.
