WASHINGTON: US job growth increased moderately in September, with the unemployment rate dropping to near a 50-year low of 3.5 per cent, which could assuage financial market concerns that the slowing economy was on the brink of a recession amid lingering trade tensions.
The Labor Department’s closely watched monthly employment report on Friday, however, showed monthly wage growth was unchanged and manufacturing payrolls declined for the first time in six months, and the retail sector continued to shed jobs.
The report came on the heels of a string of weak economic reports, including a plunge in manufacturing activity to more than a 10-year low in September and a sharp slowdown in services industry growth to levels last seen in 2016.
With signs that the Trump administration’s 15-month trade war with China is spilling over to the broader economy, continued labour market strength is a critical buffer against an economic downturn. The US-China trade war has eroded business confidence, sinking investment and manufacturing.
Nonfarm payrolls increased by 136,000 jobs last month, the government said. August data was revised to show 168,000 jobs created instead of the previously reported 130,000 positions.
The initial August job count was probably held back by a seasonal quirk related to students leaving their summer jobs and returning to school. Economists polled by Reuters had forecast payrolls would increase by 145,000 jobs in September.