American employers added 29,000 jobs in September, well below expectations, and the unemployment rate ticked up to 4.2 percent, according to Labor Department figures reported this week.
Revisions made the picture softer still: earlier estimates for July and August were cut by a combined 60,000 jobs, and July now shows a small loss. Over the past three months, hiring has averaged about 51,000 jobs a month — a pace economists describe as stall speed for a growing economy, according to the reports.
The gains that did arrive were concentrated in health care, construction and manufacturing, while government and finance shed jobs. Wage growth slowed to 3.0 percent over the year, trailing the 3.4 percent rise in consumer prices reported for August — meaning the average paycheck bought less than the year before.
The report lands two weeks after the Federal Reserve raised interest rates, and it complicates the central bank’s next decision. A cooling job market argues for patience; inflation still above target argues for the opposite, according to analysts cited in the reports.
October’s meeting now becomes a judgment call on which risk is larger. For workers, the immediate meaning is simpler: the tight labor market that powered big raises has loosened, and job security — still high by historical standards — feels less certain than it did a year ago.
The revisions buried in this report deserve the emphasis the headlines rarely give them. A combined 60,000 jobs erased from July and August, with July turning negative, rewrites the summer’s story retrospectively: the labour market did not cool in September, it had been cooling, in the data, for a full quarter while the official numbers said otherwise. Policy made against the unrevised figures was, in a precise sense, made against an economy that did not exist.
Economists have a name for the pace the report describes — stall speed — because economies that grow jobs this slowly rarely stay there. They reaccelerate or they tip, and the variable that decides is usually the one now flashing on household surveys: whether workers who feel poorer start spending like it.
Related reading:
