The economy's remarkable combination of low unemployment, strong job growth and low wage inflation continued in September, the latest edition of the employment report shows.
The unemployment rate fell to 3.9% in September, matching the 30-year low it hit in April and surprising Wall Street forecasters. Economists polled by
had forecast it would hold steady at 4.1%.
Meanwhile, job growth continued at a somewhat faster-than-expected pace. Nonfarm payrolls increased by 252,000 last month, compared with an average forecast of a 232,000 increase.
Core job growth was 204,000, the
Bureau of Labor Statistics
said, explaining that the total figure included 75,000 jobs that reappeared in September following the strike against
in August, and 27,000 jobs that disappeared as the
completed its work on the decennial headcount.
Growth of private-sector jobs has been running at a comparable pace. In 1999, private-sector job growth averaged 202,000 a month, and during the first six months of this year it averaged 186,000. So the September result will disappoint those who were expecting more of a slowdown, to confirm that the
Fed's interest-rate hikes over the last 15 months have achieved their goal and are unlikely to be continued.
But while the labor market tightened in September as measured by the unemployment rate, wage growth was contained. That shows that employers did not have to offer outsized incentives to attract and retain workers. Excessive wage growth alarms investors because it can be a precursor of price inflation.
Average hourly earnings increased just 0.2%, vs. an average forecast of 0.3%. It was the smallest earnings increase since May. While the August increase was revised to 0.4% from 0.3%, the annual rate of wage growth dropped to 3.6% from 3.8%.
Labor market conditions tightened by a more obscure measure (but one which is a Fed favorite) as well. The
augmented unemployment rate fell to 6.8% from 6.9% as the pool of available workers shrank to 9.826 million from 10.042 million.
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