Jobs report blows past expectations, showing hiring surge
Written by ABC AUDIO on October 4, 2024
(NEW YORK) — U.S. hiring surged in September, blowing past economist expectations and rebuking concern about weakness in the labor market. The fresh report marks one of the last major pieces of economic data before the presidential election.
Employers hired 254,000 workers last month, far exceeding economist expectations of 150,000 jobs added, U.S. Bureau of Labor Statistics data showed. The unemployment rate ticked down to 4.1%.
Weaker-than-expected jobs data in both July and August has stoked worry among some economists about the nation’s economic outlook.
Despite an overall slowdown this year, the job market has proven resilient. Hiring has continued at a solid pace; meanwhile, the unemployment rate has climbed but remains near a 50-year low.
“The labor market is still healthy, but we have clearly seen a slowdown,” Roger Aliaga-Diaz, chief Americas economist at investment firm Vanguard, told ABC News in a statement before the new data was released. “Now we are approaching an inflection point.”
The new data arrived two weeks after the Federal Reserve cut its benchmark interest rate a half of a percentage point. The landmark decision dialed back a years-long fight against inflation and offered relief for borrowers saddled with high costs.
Inflation has slowed dramatically from a peak of about 9% in 2022, though it remains slightly higher than the Fed’s target of 2%.
Speaking at a press conference in Washington, D.C. last month, Fed Chair Jerome Powell described the rate decision as a shift in approach as the Fed focuses more on ensuring robust employment and less on lowering inflation.
“This recalibration of our policy stance will help maintain the strength of the economy and the labor market, and enable further progress on inflation,” Powell said.
In theory, lower interest rates help stimulate the economy and boost employment. However, the Fed’s interest rate decisions typically take several months before they influence economic activity. In any case, the soon-to-be released report tracks hiring for September, meaning the majority of the period reflected in the data took place before the rate cut.
Still, the jobs report on Friday held significant implications for further rate decisions over the coming months. The Federal Open Market Committee, or FOMC, a policymaking body at the Fed, has forecast additional interest rate cuts.
By the end of 2024, interest rates will fall another half of a percentage point from their current level of between 4.75% and 5%, according to FOMC projections. Interest rates will drop another percentage point over the course of 2025, the projections further indicated.
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