The U.S. economy added fewer new positions than expected last month as companies downshifted their hiring plans amid ongoing uncertainty over whether the U.S. economy is finally succumbing to the downshift in growth happening elsewhere around the world, though the jobless rate ticked lower to a near 50-year low.

Nonfarm payrolls rose by 136,000 in September, the Labor Department's Bureau of Labor Statistics reported on Friday, below economists' consensus forecasts of 145,000 new positions for the month. The unemployment rate fell to 3.5%, its lowest since 1969, while average hourly earnings climbed 2.9% from a year earlier, a slowdown from prior months.

U.S. stocks jumped at the open on expectations that more moderate job growth will lead the Federal Reserve to cut interest rates again at its upcoming meeting at the end of the month.

"Fears of an immediate downturn in the U.S. economy have been put on the back burner for the time being," said Bankrate.com senior analyst Mark Hamrick. "The September jobs report, including the decline in the unemployment rate, checks off the boxes as being good news for workers, investors, and indeed most Americans. But the reality remains that the pace of hiring is slowing compared to last year."

Much of September's job gains came from the healthcare sector, which added 39,000 positions last month. Professional and business service jobs as well as jobs in government, transportation and warehousing also showed signs of strength.

That was offset, however, by a drop in hiring in the manufacturing sector, confirming that slowing global growth -- and in turn demand for U.S.-made goods abroad -- is faltering. 

Employers added 166,000 jobs in July and 168,000 in August, a net upward revision of 45,000, the Labor Department said. So far this year, U.S. employment has climbed by an average 157,000 jobs per month, well below the average 2018 gain of 223,000.

Meantime, a broader measure of the unemployment rate that includes those employed part-time or in contract positions as well as those unemployed and looking for work -- the so-called U-6 measure of unemployment -- fell to 6.9% in September from 7.2% in August, its lowest level since December 2000.

"We've been seeing declines in the unemployment rate off and on for months. However, the September drop in the absolute number of unemployed is unusual," said Milton Ezrati, chief economist of New York-based financial services agency Vested. "It suggests that the slowdown in hiring may in part reflect constraints on employers' ability to find candidates."

Before the report, trading in Chicago futures markets had been implying a 100% chance of at least a 0.25 percentage point reduction to the Federal Reserve's main interest rate, the fed funds rate, from the current range of 1.75% to 2% at the next Federal Open Market Committee meeting on Oct. 29-30.

Following the report's release, that percentage dropped to 81.1%, a still-high percentage of those who think the Fed will cut rates again later this month.

"Today's U.S. payroll numbers could well be the last litmus test that tips the scales for another rate cut from the Fed by the end of this month," said CMC Markets analyst Michael Hewson. "Markets are starting to price back in the prospect of this happening, hence the rebound in U.S. markets."

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