Despite economic uncertainty, September’s job growth soared by 336,000

Despite increasing interest rates, labor strikes, and instability in Washington, job growth in September was more robust than anticipated. Which indicates that the U.S. economy remains anchored. 

The Labor Department reported that nonfarm payrolls climbed by 336,000 for the month, above the 170,000 expectation in the Dow Jones consensus and more than 100,000 higher than the previous month. In contrast to the forecasted 3.7%, the unemployment rate was 3.8%.

Following the release of the data, Treasury yields surged, and stock market futures took a sudden shift in the wrong direction. The Dow Jones Industrial Average fell over 150 points in early trading as stocks opened lower. The yield on the 10-year Treasury note increased by 0.11 percentage points to 4.83%, hitting close to its highest levels since the beginning of the financial crisis.

The increase in payrolls was the strongest monthly figure since January.

George Mateyo, chief investment officer of Key Private Bank, stated that the U.S. labor market “continues to display exceptional vigor, with the number of new jobs generated last month roughly twice as large as predicted.”

Investors have recently been nervous that a strong economy may force the Federal Reserve to maintain high-interest rates and raise them further if inflation persists. However, wage growth lagged behind expectations; average hourly wages increased by 0.2% for the month and by 4.2% from a year earlier, as opposed to the predicted 0.3% and 4.3%, respectively.

Job growth by industry statistics:

•  From a sector viewpoint, leisure and hospitality led the way with 96,000 new jobs.
• The government created 73,000.
• The healthcare employed 41,000.
• Professional, scientific, and technological services were among the other gainers, with 29,000 new jobs. 

However, jobs in the film and sound recording industries decreased by 5,000, bringing the total number of jobs lost since May to 45,000. Whereas the number of jobs increased by 234,000 in the service sector and just 29,000 in the manufacturing sector. The leisure and hospitality sector’s average hourly wages were unchanged from the previous month but increased 4.7% from the prior year.