Key jobs data due out Friday is expected to show a job market that’s broadly holding up, even though a repeat of August’s blockbuster figures is unlikely.
Economists surveyed by Bloomberg expect the latest Labor Department data to show that the US added 85,000 jobs in September, far below August’s surprisingly large gain of 162,000 roles. The unemployment rate is expected to remain at 4.1% for a third straight month.
A return to lower but still positive job creation would bring the market back in line with the “low hire, low fire” environment that has defined much of the past two years. It would also be a sign that the Federal Reserve’s interest rate hiking plans haven’t stalled hiring.
“We remain upbeat on the US labor market as the Fed’s tightening cycle gets underway, expecting economic momentum to push the jobless rate lower into early 2027,” Andrew Husby, senior economist at BNP Paribas, wrote in a note.
While a 4.1% unemployment rate is relatively low and company layoffs have remained limited, corporations have also been slow to make new hires. Job seekers don’t appear to be filling available openings very quickly, suggesting that “the economy appears to be generating less employment growth from a given level of vacancies than in prior cycles,” wrote Adam Schickling, senior economist at Vanguard.
Other labor market data released ahead of the monthly jobs report show a mixed picture of the economy: August survey data showed that job openings, hiring, and layoffs were little changed in August, while data from payroll company ADP showed that private-sector employers added a healthier-than-expected 90,000 roles in September.
Meanwhile, layoff and hiring data from outplacement firm Challenger, Gray & Christmas showed that layoff plans were down, but expected year-end seasonal hiring is off to a slow start.
In all, the recent data suggests that job growth in many industries has been solid although the numbers may initially appear to underperform due to seasonal factors. August data frequently includes difficult-to-parse summer hiring trends, as well as the return to work of thousands of schoolteachers, which can make September figures look comparably weak
“In our view, the recent labor-market backdrop points to further broadening in hiring across industries in September, even if the headline payroll figure temporarily understates that improvement,” Bank of America economist Shruti Mishra wrote in a note.
