American employers added 136,000 jobs in September; Unemployment drops to 3.5%: NPR
A worker assembles an industrial valve at Emerson Electric Co.'s plant in Marshalltown, Iowa. The manufacturing sector has suffered a slowdown in the midst of the ongoing trade war.
Tim Aeppel / Reuters
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Tim Aeppel / Reuters
A worker assembles an industrial valve at Emerson Electric Co.'s plant in Marshalltown, Iowa. The manufacturing sector has suffered a slowdown in the midst of the ongoing trade war.
Tim Aeppel / Reuters
Updated at 09:02 ET
U.S. employers added 136,000 jobs in September – a sign of continued resilience in the labor market amid rising signals that the economy is losing steam.
Unemployment fell to 3.5% – the lowest since December 1969 – but the pace of employment has slowed down from last year.
The job gain for the previous two months was revised up by a total of 45,000.
An index of production activities released on Tuesday showed that the factory sector had a contract for the second month in a row. Factories throw 2,000 jobs in September.
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The much larger service sector of the economy continued to grow in September, but at a significantly lower pace. Private sector employers added 114,000 jobs during the month.
While government agencies added a total of 22,000 jobs, only 1,000 were temporary workers in the census.
Dealers continued to cut jobs and lost more than 11,000 in September.
"In the midst of this narrative that weakness is concentrated specifically in industry, it is now clearly spread to other parts of the economy," said senior economist Tim Quinlan of Wells Fargo Securities.
The factories are especially sensitive to global forces, including the trade war. But mounting tariff rates has also taken a huge toll on consumer confidence.
"As they begin to scale back spending, not only on goods that are affected by customs, but also some of your other service spending, it is now having a knock-on effect in the broader service economy, "said Quinlan.
Average hourly wage over the past year has increased by 2.9%. This is down from 3.2% in the 12 months ending in August.
"We do not see as much wage movement as we want," said Becky Frankiewicz, president of the ManpowerGroup North America Temporary Employment Agency. "Given supply and demand, we expect to see more."
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Job gains and economic growth have been offset from a year ago. The economy grew at an annual rate of only 2% in the second quarter. And forecasters say growth in just the third quarter may have been even lower. Monthly job benefits over the past three months have averaged 157,000, compared to an average of 189,000 jobs over the same period a year ago.
Labor force participation remained steady in September at 63.2%.
Quinlan does not forecast a recession, but he expects growth to slow to an annual rate of only 1.5% in the next quarters – barely above the booth rate.
"It certainly feels like we're getting closer to that razor edge," he said. "I believe that many participants in the financial market are just waiting for the next shoe to fall."
