Published October 6. 2024 10:24 am est
by Richard F. Cason,
Editor,
NEWSMOVESMARKETSFOREX ®
KEY TAKE AWAYS:
- U.S. Jobs report rose by 254,000 new jobs added to the U.S. Labor Markets for the month of September
- Sept 2024 Labor participation still remains flat and unchanged at 62.7 percent
- Unemployment rate holds steady at 4.1% for the month of Sep 2024
- September Joblessness numbers for Blacks improved modestly to 5.7% while Hispanics unemployment rate also fell to 5.1 percent respectively
- Positive September 2024 Job Gains in construction and health care, food services and drink place sectors
U.S. Labor Market Shows Strength: Non-Farm Payrolls Rise 254,000 September 2024
The latest Employment Situation Summary from the U.S. Bureau of Labor Statistics on Friday October 4, 2024 reveals that the U.S. labor market remains robust, with non-farm payroll employment increasing by 254,000 in September 2024.
This surge surpasses the average monthly gain of 203,000 jobs observed over the past year and exceeds economists’ expectations, who had projected an increase of around 170,000 jobs. The data highlights the economy’s resilience in the face of rising interest rates.
The unemployment rate remained stable at 4.1%, with approximately 6.8 million Americans unemployed—up from 6.3 million a year ago. While the steady job growth is a positive sign, the increase in the number of unemployed individuals underscores ongoing economic pressures.
Key sectors contributing to the job gains include
**Food Services and Drinking Places**: This sector saw a significant increase of 69,000 jobs, far exceeding its 12-month average of 14,000. –
**Health Care**:Although it added 45,000 jobs, this figure is below the average monthly increase of 57,000, indicating potential challenges in healthcare staffing. –
**Government**: Employment in this sector rose by 31,000 jobs, continuing its upward trend. –
**Construction**: This sector added 25,000 jobs, consistent with its prior monthly performance.
The report also highlighted that long-term unemployment—individuals jobless for 27 weeks or more—held steady at 1.6 million, accounting for 23.7% of all unemployed workers.
Wage growth showed promising signs as well, with average hourly earnings increasing by $0.13 (0.4%) to reach $35.36. Over the past year, wages have risen by 4.0%, providing some relief to workers facing rising living costs driven by inflation.
Black and Hispanic Unemployment Rate
The report also highlighted some sobering statistics. The unemployment rate for Black workers stood at 5.7 percent, down by .4 percent from the previous month of August, while Hispanic workers faced a rate of 5.1 percent, also down by .4 percent from the previous month.
These figures indicate that, while there have been gains in employment, disparities remain. The unemployment rate for teenagers was notably high at 14.3 percent, underscoring ongoing challenges for young job seekers.
Private Non-farm Payroll Employees
The average workweek for private non-farm payroll employees edged down slightly to 34.2 hours, a development that economists are closely monitoring for its implications on productivity and labor utilization.
Importantly, the report noted that Hurricane Francine, which impacted southern Louisiana on September 11, did not significantly disrupt national payroll employment or the overall unemployment rate.
Forex Currency Market
In response to the positive labor market data, the Forex currency market reacted with heightened volatility. The U.S. dollar strengthened against major currencies, as traders interpreted the strong job growth as a signal that the Federal Reserve might continue its path of interest rate hikes to combat inflation.
This optimism regarding the U.S. economy led to increased demand for the dollar, while currencies like the euro and yen faced downward pressure.
As the economy adjusts to the challenges posed by higher interest rates, analysts will be watching the upcoming state employment estimates set to be released on October 22, 2024.
These figures will offer deeper insights into regional job trends and the broader economic landscape as the nation navigates the interplay between labor market dynamics and monetary policy.
U.S. Economy
The latest employment data underscores a resilient labor market adjusting to a landscape shaped by higher interest rates. While certain sectors flourish, others face challenges, and wage growth offers a mixed picture of economic well-being.
As the Federal Reserve continues its monetary policy adjustments, the interplay between labor market dynamics and interest rates will be critical in shaping the U.S. economic outlook.
Impact of Interest Rates
The Federal Reserve’s strategy of increasing interest rates has raised borrowing costs for both consumers and businesses, which, in theory, should dampen economic activity.
However, the labor market’s continued strength suggests that businesses are still willing to expand and hire, possibly due to pent-up demand following pandemic-related disruptions.
Economists remain vigilant, as sustained job growth in this environment could fuel inflationary pressures, prompting further rate hikes.
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Reference: U.S. Bureau of Labor and Statistics. (2023). Employment Situation Summary Retrieved from https://www.bls.gov/news.release/empsit.nr0.
