The latest employment report from the Labor Department found business’ hiring much stronger in September than expected.
Nonfarm payrolls increased by 336,000 in September, more than twice the consensus analysts’ estimate. The unemployment rate remained 3.8%.
The report contradicts economists’ sentiments that the economy was struggling.
George Mateyo, chief investment officer at Key Private Bank, said: “Slowdown? What slowdown? The U.S. labor market continues to exhibit amazing strength.”
Higher interest rates, labor strikes and the government nearly shutting down were expected to drag the economy. Instead, the payroll report posted its best monthly number since January.
Julia Pollak, chief economist at ZipRecruiter, said: “This is a pivotal moment for the labor market. There is the sense that these very restrictive interest rates are holding back activity, such that we are seeing a fairly rapid descent in job growth. And so the question really is, ‘How much will job growth slow?’”
Diane Swonk, chief economist for KPMG, described the dynamic as a “relay race,” with some interest-rate sensitive sectors running out of steam, and handing the baton off to other sectors—keeping the economy from falling into a recession.
“The strongest sectors coming out of the reopening, namely professional and business services, are no longer driving employment gains,” Swonk said. “At the same time, you are seeing health care boom, which had lagged terribly behind because of the high quit rate and burnout.”
