US jobs growth surges in September

Stronger-than-expected data could complicate direction of monetary policy

Jobs growth in the US accelerated in September, complicating the future path of interest rate rises in the world’s biggest economy.

Numbers from the Bureau of Labor Statistics showed that US employers added 336,000 new jobs in September. That marked a sharp step up from August’s figure, which was revised up by 40,000 to 227,000. Economists surveyed by Bloomberg had expected a September reading of 170,000.

The unemployment rate came in at 3.8 per cent in line with August’s figure and slightly higher than expectations of 3.7 per cent.

Average hourly wages rose by 0.2 per cent month on month, matching the rise reported in August but coming in below expectations of 0.3 per cent growth. On an annual basis, wages rose by 4.2 per cent, compared with 4.3 per cent in the prior period.


The report will offer the Fed an important data point as the central bank decides whether its mission to quell inflation is succeeding or whether rates, already at a 22-year high, need to rise further. The Fed meets again at the end of the month.

Investors will also pore over Friday’s job figures for clues about future monetary policy, after fears that the Fed would keep rates “higher for longer” triggered a recent sell-off in stocks and bonds.

The Fed held interest rates at 5.25-5.5 per cent at its most recent meeting on September 20th. But most of the central bank’s officials expect one more increase in 2023 and a slower pace of cuts over the next two years, according to data from the Fed.

Fed chairman Jay Powell recently said the central bank would proceed “carefully” with its next interest rate decisions. Many officials have stressed that the central bank can afford to be “patient” after raising interest rates several times over the past 18 months.

Mary Daly of the San Francisco Fed said on Thursday the central bank did not have to “rush to any decisions” given that “monetary policy is restrictive and financial conditions are tight”. – Copyright The Financial Times Limited 2023