Monday, May 27, 2024

US job growth beat expectations in September and the unemployment rate was unchanged

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By Lucia Muticani

WASHINGTON (Reuters) – U.S. job growth picked up in September, indicating that the labor market is strong enough to prompt the Federal Reserve to raise interest rates again this year, even if wage growth moderated.

Nonfarm payrolls rose by 336,000 jobs last month, drawing much attention as data for August showed an increase of 227,000 jobs instead of 187,000, the jobs report released Friday said.

Economists polled by Reuters had expected an increase of 170,000 jobs. Estimates range from 90,000 to 256,000.

The increase was larger than expected despite the lower-than-expected temporary jobs data for September due to problems adjusting for seasonal factors as education sector workers return to their jobs after the summer break.

The current strength of the labor market indicates that monetary policy will remain tight for some time, 18 months after the US Federal Reserve began raising interest rates.

The unemployment rate was unchanged at an 18-month high of 3.8 percent.

Most economists do not believe the US Federal Reserve will raise interest rates again this year.

Monthly wage growth was modest, with average hourly wages rising 0.2 percent after a similar increase in August. In the 12 months to September, wages rose 4.2 percent after posting a 4.3 percent increase in August.

Wages are still growing faster than the 3.5 percent rate that economists say is in line with the U.S. Federal Reserve’s target of 2 percent inflation.

(Prepared by Salma Najm for Arabic Bulletin – Editing by Ayman Saad Muslim)

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