The U.S. economy added more jobs than expected in September, according to a report from the Labor Department on Friday. Nonfarm payrolls increased by 254,000, surpassing the 150,000 forecast. The unemployment rate also dropped to 4.1%, down by 0.1 percentage point.
The report, which included upward revisions from previous months, alleviated concerns about the labor market’s condition. August’s total was revised up by 17,000, while July saw an addition of 55,000 jobs, bringing the monthly growth to 144,000.
Job creation extended to wage growth, with average hourly earnings rising by 0.4% for the month and 4% from a year ago. The average workweek decreased slightly to 34.2 hours.
The positive report led to gains in stock market futures and higher Treasury yields. Job creation was particularly strong in the restaurant and bar industry, adding 69,000 positions in September. Health care and government sectors also contributed significantly to job growth.
A broader measure of unemployment, which includes discouraged workers and part-time employees seeking full-time work, decreased to 7.7%. The labor force participation rate remained steady at 62.7%.
The survey of household employment showed a gain of 430,000 jobs, with the employment-to-population ratio rising to 60.2%. Full-time positions increased by 414,000, while part-time work decreased by 95,000.
Following the report, futures market pricing indicated expectations of consecutive quarter percentage point interest rate cuts by the Federal Reserve in November and December. Fed Chair Jerome Powell described the job market as “solid” but noted a cooling trend over the past year. The Fed is considering further interest rate reductions, with Powell suggesting quarter-point increments at least through the end of the year.
