US labor market surges in September with 119,000 new jobs despite hiring slowdown signs

WASHINGTON, DC: The economy reportedly added 119,000 jobs in September, signaling stronger-than-expected hiring momentum before the federal government shutdown halted the official data releases.

According to the newly released data from the Bureau of Labor Statistics (BLS) on Thursday, November 20, September’s gains were driven by health care, food and drinking establishments, and social assistance.

But weaknesses emerged with manufacturing shedding 6,000 jobs, while transportation and warehousing lost 25,300, continuing steep declines in both sectors.

Report released after shutdown delay

The Bureau of Labor Statistics also revised earlier months downward. August payrolls were cut by 26,000, shifting the month from a modest gain to a loss, and July’s total was trimmed by 7,000.

The unemployment rate rose to a reported 4.4%, up from 4.3%, partly because the labor force expanded by 450,000 new job seekers.

The report, originally set for October 3, was delayed by the shutdown and finally released on Thursday. October’s missing jobs data will be bundled into the December 16 release covering November, the BLS stated.

Layoffs spike in October as major companies slash jobs

With official data absent for six weeks, analysts turned to private indicators, nearly all of which showed signs of strain.

Roughly 39,000 workers received layoff notices in October, according to the Cleveland Federal Reserve tracking, a level last seen in May and one typically associated with economic crises.

Another survey by Challenger, Gray & Christmas logged 153,000 job-cut announcements in October. While some analysts viewed that data cautiously, it aligned with high-profile layoffs at Amazon, General Motors, IBM, Microsoft, Paramount, Target, and UPS; all of which have announced plans to cut tens of thousands of jobs.

Federal Reserve split over December rate cut amid inflation fears

The condition of the labor market now looms over the Federal Reserve’s next policy decision.

On Monday, Fed Governor Christopher Waller said a December rate cut was needed to prevent further deterioration. “After months of weakening,” he said, upcoming data was unlikely to change his view.

But Fed Chair Jerome Powell, announcing a 0.25% rate cut last month, was more cautious, suggesting that the labor-market cooling appeared “gradual” and declining to guarantee another cut.

The meeting minutes released showed sharp divisions among policymakers. Several warned that additional cuts could worsen already elevated inflation by encouraging greater borrowing.

“Most participants noted that… further rate cuts could add to the risk of higher inflation becoming entrenched,” the minutes said.

Despite layoff headlines, some economists argue the broader labor market is not yet in crisis. Jobless claims remain low, and payroll processor ADP recently reported a slight rebound in hiring.

During the US-Saudi Investment Forum on Wednesday, President Donald Trump said that under his administration, new jobs are being created. "About 1.9 million more American-born workers are employed today than when I took office," he said.

 "Under Biden, 1 out of every 4 new jobs went to increase the size of the federal government. Under my administration, 100% of all new jobs created came out of the private sector," the president added.