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The US economy added 156,000 jobs in September, and the unemployment rate unexpectedly ticked up, according to data released Friday by the Bureau of Labor Statistics.
The increase in nonfarm payrolls was lower than expected. But it remained strong enough to indicate that the job market is still robust, with employers unable to find all the skilled workers they want to hire.
“No alarms, no surprises,” Thomas Simons, an economist at Jefferies, said.
The median of economists’ forecasts for the change in nonfarm payrolls was 172,000, according to Bloomberg. The change in nonfarm payrolls for August was revised up by 16,000 to 167,000.
The unemployment rate increased to 5% because more people began looking for work. It was forecast to remain unchanged near an eight-year low of 4.9%.
More wage growth was forecast for American workers. Average hourly earnings rose by 0.2% month-on-month, less than the 0.3% rate expected. They increased by 2.6% compared with September 2015, just as forecast.
Markets focused on the Federal Reserve where this report was concerned, as expectation rose that the central bank would raise its benchmark interest rate at its December meeting.
“The lack of any ‘great’ or ‘terrible’ details of this report suggests it won’t do anything to move the needle for the Fed,” Simons said.
“They are still on track to raise rates later this year, but the data today shows there is no urgent need to move as soon as November.”
The Fed could also bypass its November meeting, given both its precedent of not raising rates without a scheduled news conference and the closeness to the presidential election.
Fed fund futures, which reflect traders’ bets for interest rates, rose to a 65.1% probability that the Fed would move in December.
Via Bloomberg, here’s what Wall Street was expecting:
- Nonfarm payrolls: +172,000 Unemployment rate: 4.9% Average hourly earnings month-on-month: +0.3% Average hourly earnings year-on-year: +2.6% Average weekly hours worked: 34.4 Change in manufacturing payrolls: -4,000