Employers added 119,000 jobs in September, blowing past expectations

Employers across the U.S. added 119,000 jobs in September, marking a pickup after previous employment data had shown a slowdown in hiring. The report marks the first official job tally since the government shutdown ended last week, ending a six-week blackout on labor data.

The numbers

Economists had forecast payroll gains of 50,000 jobs in September, according to a poll by FactSet. 

The unemployment rate edged up to 4.4% in September from 4.3% in August. With robust job growth in September, that suggests more people are re-entering the workforce to search for a job, economists said. 

The Labor Department also revised job growth down for July and August by a combined 33,000, a sign that hiring during those months was weaker than previously reported. 

The health care sector saw the biggest boost in jobs, with 43,000 hires in September. The federal workforce, meanwhile, lost 3,000 jobs that month.

The financial firm Capital Economics estimates 150,000 federal workers will fall from the government’s payroll in the fourth quarter this year, mainly due to the Trump administration’s deferred resignation programs.

The job market has been losing momentum for much of this year, with previous employment reports indicating a slowdown in hiring. At the same time, employers have been announcing layoffs in recent months, leading to the worst October for job reductions in 22 years, according to outplacement firm Challenger, Gray & Christmas. 

Verizon said it would lay off 13,000 employees on Thursday. That follows major recent job cuts by Target, Amazon, UPS and other major companies. 

What it means

The September employment figures suggest job growth remains firm amid concerns that the labor market was at risk of stalling.

Although job growth has weakened, “it is not collapsing,” Paul Ashworth, chief North America economist at Capital Economics, said in a report.

The hiring numbers will shape Federal Reserve officials’ decision on whether to cut interest rates at their next meeting in December. Art Hogan, chief market strategist at investment firm B. Riley Financial, thinks the odds of a rate cut have “diminished significantly” given there will not be a full October employment report and the November report won’t be issued until after the Fed meets in December.

Ashworth expects the Fed to delay its next rate cut until January. The probability of a rate cut now stands at 22%, according to economists polled by FactSet.

Delayed employment reports

The September jobs report, originally slated for Oct. 3, was pushed back by the government shutdown that ended on Nov. 12. The delay means it offers a belated snapshot of the labor market just before federal funding lapsed on Oct. 1.

On Tuesday, the Bureau of Labor Statistics said it won’t publish the full October employment report, which was originally slated for release on Nov. 7. Instead, the agency will fold select October data into the November report, which is set for release on Dec. 16.