The figures mark a clear sign of the labor market’s overall resilience in 2024 in the face of multiple challenges. Rising immigration is increasing the overall supply of workers while layoffs have remained low, helping to sustain strong consumer spending – a key driver of the economy.
In addition to the payroll growth, average hourly earnings saw a 0.4% rise in September, following a 0.5% increase in August. On an annual basis, wages grew 4.0%, slightly up from the 3.9% rise in the previous month.
While the unemployment rate’s decline from its August level was notable, it remains higher than the 3.4% recorded in April 2023. The increase earlier this year was partly attributed to a rise in the 16-24 age group and temporary layoffs during the annual shutdown of automobile plants in July.
All eyes on the Fed after stronger-than-expected jobs report
The Federal Reserve’s interest rate decisions have been a focal point in recent months, with policymakers signaling caution in the face of evolving economic conditions. In September, the Fed introduced its first rate cut since 2020, trimming rates by 50 basis points following a series of hikes that had seen interest rates spike since 2022.
Fed chair Jerome Powell has emphasized that while the labor market has softened somewhat, recent revisions to economic data reveal a stronger-than-expected performance in areas such as growth, income, savings, and corporate profits. Powell hinted earlier this week that the central bank may not be in a rush to implement further rate cuts, despite market speculation about additional reductions later this year.