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US nonfarm payrolls surge in September

H.S. Borji
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US nonfarm payrolls surge in September

US employers added more than 200,000 jobs in September for the seventh time in eight months, adding further evidence the labour market recovery was deepening in the second half of the year in what has been described as remarkable period of job growth.

The US economy added 248,000 nonfarm payrolls in September, following an upwardly revised gain of 180,000, the Labor Department reported today in Washington. A median estimate of economists called for a gain of 215,000.

The unemployment rate plunged to 5.9 percent from 6.1 percent, the lowest rate since mid-2008, as the number of unemployed persons decreased by 329,000 to 9.3 million. The labour force participation rate, which represents the percentage of Americans employed or actively searching for work, declined to 62.7 percent from 62.8 percent.

The unemployment rate has declined 1.3 percentage points since August 2013. At 5.9 percent, however, unemployment is still considered high by historical standards.

Employment gains were biggest in professional and business services, retail trade and health care, official data showed.

Employment in professional and business services increased 81,000, compared with an average gain of 56,000 over the previous 12 months.

Employment in retail trade increased 35,000, led by a 20,000 gain in food and beverage stores.

Health care added 23,000 jobs last month, slightly higher than the average monthly growth rate of 20,000 over the previous 12 months.

Employment levels also increased in information, mining, leisure and hospitality, construction and financial services. Employment levels were little changed in manufacturing, wholesale trade, transportation and government services, official data showed.

Today’s data alleviates concerns that job growth was beginning to slow in the third quarter. August had snapped six consecutive months of 200,000-plus job gains, the longest such streak since 1997. US employers have added an average of 213,000 payrolls over the past 12 months, official data showed.

On Wednesday the ADP Institute said US employers added 213,000 private payrolls last month, following a gain of 202,000 in August. That was the sixth consecutive month the economy added more than 200,000 private sector jobs, ADP said.

“Nearly all industries and companies of all sizes are adding consistently to payrolls,” said Moody’s Analytics chief economist Chris Zandi in a Wednesday press release.

On Thursday the Labor Department said new applications for jobless benefits declined 8,000 to 287,000 in the week ended September 27. The four-week moving average for jobless claims, considered a less volatile measure of firings in the labour market, declined 4,250 to a nearly eight-and-a-half year low of 294,750.

The combined forces of job growth and reduced layoffs suggests the labour market is tightening, as employers hire and retain staff to meet ongoing demand. However, as today’s data demonstrated, more jobs have not translated into higher wages.

Average hourly earnings were unchanged in September, a sign more Americans are facing affordability challenges. Average earnings growth was flat, following a gain of 0.3 percent in August.

Compared to September 2013, average hourly earnings were up only 2 percent, compared to 2.1 percent the previous month.

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