Despite efforts by the Federal Reserve to slow the economy, the unemployment rate declined even though job growth fell short of expectations in September.
The nonfarm payrolls increased by 263,000 in February.
The unemployment rate was higher than expected as the labor force participation rate fell and the size of the labor force increased. The measure that includes discouraged workers and those who hold part-time jobs for economic reasons fell to 6.7% from 7%.
September's payroll figure was the lowest monthly increase in more than a year.
In the closely watched wage numbers, average hourly earnings rose 3% in line with estimates and 5% from a year ago, an increase that is still above the pre-pandemic norm but 0.1 percentage point below the forecast
The stock market futures fell after the release. The numbers were looked at by investors for an indication of how the Fed will react to inflation.
Jeffrey Roach said that this puts the nail in the coffin for another 75basis point rate increase in November. There is a basis point.
Leisure and hospitality led the gains with an increase of 83,000, leaving the industry 1.1 million jobs short of its February 2020 pre-pandemic levels.
Health care, professional and business services, and manufacturing all contributed to the increase. Both construction and trade were up.
The report missed expectations due to a drop in government jobs. A decline in hiring at the state and local level points to a report that was largely in line with expectations and shows a resilient jobs market.
Financial activities and transportation and warehousing lost thousands of jobs.
The Fed has been trying to bring down inflation, which is at its highest annual rate in more than four decades. The central bank has raised rates five times this year and is expected to keep hiking through the end of the year.
Job growth has remained strong despite the mismatch between supply and demand that has left 1.7 job openings for every available worker. The increase in average hourly earnings has fallen short of the inflation rate but it has helped drive up wages.
The rate hikes are expected to cause some pain to the economy. According to members of the Federal Open Market Committee in September, the unemployment rate is expected to rise to 4.4% in 2023 and then fall to 4% over the long run.
The Fed is expected to raise its rate by 0.75 percentage point in November. The federal funds rate is expected to rise by half a point in December and another three-quarter point in January.
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