US job growth fades in September; jobless rate 5.1 per cent

The US job market faltered in September and hiring in prior months was slower than thought, the Labour Department said today in a report pointing to a slowing economy.
The September jobs report gave a downbeat picture of the labour market as the Federal Reserve considers its first interest rate hike in more than nine years, and suggested the economy was being impacted by concerns about China's economic slowdown, which has roiled financial markets.
Job growth came in at 142,000 jobs in September, well below analyst estimates of 205,000.
The already weak August jobs number of 173,000 was revised sharply lower to 136,000, surprising analysts who generally had anticipated an upward revision. The July number also was lowered, making a combined 59,000 fewer jobs than previously reported.

"Today's employment report has most likely removed even the last small chance for a rate hike as early as this month," said Harm Bandholz, chief US economist at Unicredit.
In a broader look at the slowdown, the three-month average was a tepid 167,000 jobs a month, underlining an economy that was losing momentum in the third quarter. Just a month ago, the average had been 221,000, showing resilience to the turmoil triggered by China's shock currency devaluation in mid-August.

There were other signs of persistent weaknesses that the Fed views as showing slack in the jobs market. The labour force participation rate, already extremely low, weakened further to 62.4 per cent from the 62.6 per cent of the prior three months.

"Adding to the negative tone of today's report is the fact that the 0.2 percentage point drop in the participation rate to a 38-year low did not spur a further decline in the unemployment rate," Bandholz said.
Some 579,000 people dropped out of the workforce, helping to leave the unemployment rate in September unchanged at a seven-year low of 5.1 per cent, as expected.
The number of unemployed people also was little changed at 7.9 million.
Muted wage growth, an indicator of weak hiring demand, also slowed a bit. Average hourly earnings fell by one cent to USD 25.09, following a gain of nine cents in August.

"Job growth clearly is fading and has been fading for some time," said Robert Brusca of FAO Economics.