A sign for a company that hires employees. (Photo by Joe Raedle/Getty Images)
A month before voters cast their ballots, the U.S. Bureau of Labor Statistics released a report showing a strong labor market with rising wages, a lower unemployment rate and the addition of 254,000 jobs to the economy.
According to a September report from Pew Research, 81 percent of registered voters believe the economy is key to their vote for president this fall.
“We saw job creation exceed expectations, the unemployment rate fell slightly and we saw strong wage growth that continued to outpace inflation,” said Kitty Richards, senior strategic advisor at Groundwork Collaborative, a progressive economic policy think tank. “We don’t have the new inflation numbers from last month, but wage growth has been strong and has been exceeding inflation for about 16 months now and that’s all very good things.”
The unemployment rate was 4.1% in September, compared to 4.2% in August and 4.3% in July. Rising unemployment earlier this year had some economists concerned that the Federal Reserve’s decision in recent months not to cut the fed funds rate was starting to hurt the labor market. In September, the Fed decided to cut interest rates by half a percentage point, easing these concerns.
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The Fed began an aggressive campaign to combat inflation by raising rates in March 2022 and stopped in mid-2023, but rates remain high and have affected the economy, especially the housing market, economists say. Inflation has cooled significantly since its peak in June 2022.
“If today’s jobs report had said that the labor market was weakening further, I think many of us would be more aggressively concerned about the risks that high interest rates pose to the labor market,” Richards said. “It’s great to see that those risks have not yet been overcome… But there are risks and we need to be very aware of what it would mean if we saw the unemployment rate rise again.”
The report also showed continued job growth last month in healthcare, government, social security and construction. Wage growth has been strong, rising 4% last year. Adult men saw their unemployment rate fall to 3.7% last month. Women, Black people, Asian people, white people, Hispanic people and teenagers all experienced little or no change in their unemployment rates in September.
The employment-to-prime-age population ratio, which is a measure of how well the economy provides jobs to people interested in working, remains at its highest level in 23 years in today’s jobs report.
“I think the labor market remains healthy and strong and it’s great to see that labor force participation and employment rates remain high,” Richards said. “That’s what we want to see in the kind of economy that will drive wage growth for working people and continue some of the gains we’ve seen since the COVID recession.”
But she added that there is still room for these measures to grow.
“We’ve seen that the economy can perform better than many people thought before we went through this really extended period of low unemployment due to the COVID recession. And I hope we continue to see this kind of growth,” she said.
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