Private payrolls in the US increased 114,000 in September, slightly below an upwardly revised gain of 122,000 in the previous month, the Labor Department reports. The latest round of hiring is strong enough to minimize fears that a recession is imminent, but still weak enough to raise questions about where the economy’s headed in the fourth quarter.
The government’s data also shows that the unemployment rate ticked down to 3.5% — a 50-year low. Meanwhile, wage growth cooled: average hourly earnings increased 2.9% on a year-over-year basis, the slowest pace in over a year.
“Overall it is a bit of a mixed bag,” says Torsten Slok, chief economist at Deutsche Bank Securities.
The one-year trend in private payrolls, however, managed to hold steady at a 1.6%, matching The Capital Spectator’s projection, based on the average point forecast via a combination-forecasting model.
The steady one-year change, for now at least, lends support to arguing that the recent slowdown in hiring is stabilizing at a moderate pace. It doesn’t hurt that jobless claims, a leading indicator for payrolls, remain low, close to a half-century low.
Today’s employment data isn’t strong enough to completely dismiss recent worries about slow growth and recession. But there’s no smoking gun here for expecting the worst around the next corner either. In other words, the case for expecting slow growth remains the baseline assumption until or if new data offers a reason to think otherwise.
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