US adds just 29,000 jobs weeks before midterm elections
WASHINGTON — The United States added just 29,000 jobs in September while unemployment rose to 4.2%, delivering a weaker-than-expected employment report little more than a month before voters head to the polls in the midterm elections.
Economists surveyed by Reuters had expected employers to add about 90,000 jobs during the month. August’s increase was also revised down from 162,000 to 133,000, while July was revised from a gain of 21,000 jobs to a loss of 10,000. Together, the revisions removed 60,000 jobs from the previous estimates for those two months.
The unemployment rate increased from 4.1% to 4.2% as more Americans entered the labour force. Labour force participation rose to 61.8%, while average hourly earnings increased by only 0.1% during September. Annual wage growth slowed to 3%.
The figures show an American labour market in which hiring has weakened significantly without a corresponding surge in layoffs. First-time applications for unemployment benefits have remained historically low, supporting the view among some economists that employers are holding on to existing workers even as they become more cautious about adding new staff.
Healthcare, construction and manufacturing recorded employment gains during September, while government, information and professional services were among the areas that lost jobs.
The report arrives as employment and household finances become part of the economic debate ahead of the November midterm elections. President Donald Trump’s administration has pointed to economic growth and investment, while Democrats have criticised the administration’s economic policies and focused on the pressure facing households from living costs. The September employment figures provide new data for that debate but do not, on their own, determine broader economic performance or voter sentiment.
The weaker jobs numbers also have implications for the Federal Reserve. The central bank raised its benchmark interest rate in September to a range of 3.75% to 4% as it continued efforts to contain inflation. Expectations of another increase at the Fed’s October meeting fell after the employment report.
Federal Reserve officials have indicated that they will consider additional inflation and economic data before making their next decision. Cleveland Fed President Beth Hammack said the September employment report remained consistent with recent hiring trends, while Chicago Fed President Austan Goolsbee said both another rate increase and a pause remained under consideration.
The October employment report will be released only days before the midterm elections, giving voters and policymakers one more major reading of the US labour market before election day.
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