Jobs

US created 248,000 jobs in Sept

Breaking down Friday's blockbuster jobs report
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Breaking down Friday's blockbuster jobs report

Job growth bounced back in September after a disappointing August, with the U.S. economy creating 248,000 fresh positions.

The Bureau of Labor Statistics also reported that the unemployment rate fell to 5.9 percent as the labor force participation rate fell to 62.7 percent, its lowest level since February 1978. Taken together, though, the numbers renewed hopes that employment growth is on a sustainable track higher.

Wall Street stocks jumed on the news.

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August's meager 142,000 reading was revised up to 180,000, while the July number came up from 212,000 to 243,000.

The bounce in employment provided good news for the workforce in terms of total jobs, but wages remained stagnant. The average hourly wage actually fell one cent to $24.53, while the average work week edged higher to 34.6 hours. Wage growth is at just 2 percent on an annualized basis.

A Chrysler assembly line employee in Warren, Mich., works on a Ram 1500 transmission, Sept. 25, 2014.
Getty Images

"This does not belie either improvement in general welfare or in the sense of earnings for sufficient encouragement for people to get back in the labor force," said Mark Hamrick, Washington bureau chief for Bankrate.com.

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Professional and business services added the most positions, with 81,000, while retail rose 35,000. Food and beverage contributed 20,000, due mostly to what the BLS described as "employment disruptions at a grocery store chain in New England," an apparent reference to the Market Basket impasse in the Boston area. Health care grew by 23,000, while construction added 16,000.

The job creation was tilted heavily toward full-time positions, which surged by 671,000. Part-time jobs actually fell by 384,000.

An alternative measure that includes those who have quit looking for jobs or are working part time for economic reasons—the underemployed—dropped from 12 percent to 11.8 percent.

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The report, though largely positive, is unlikely to change the Federal Reserve's direction on monetary policy. The U.S. central bank intends on ceasing its monthly bond-buying program in October, while still keeping short-term interest rates near zero.

However, Chair Janet Yellen's belief that labor force participation eventually will rebound sustained some damage.

"The chances of the cyclical rebound in the participation rate that the Fed expects appear to be receding," Paul Dales, senior U.S. economist at Capital Economics, said in a note. "At some point, the Fed may have to conclude that the unemployment rate is a reasonably accurate measure of the amount of slack."

In recent history, September has been a below-trend month when it comes to employment growth.

In 2012, the month posted 161,000 new jobs at a time when the average had been 179,000, while 2013 saw a 164,000 count as the average had been 197,000, according to Deutsche Bank.

Economists had kept their hopes in check for the month, with an anticipation of 215,000 in a year when the average has been 213,000.

CORRECTION: This version corrects the spelling of Paul Dales' last name and corrects the average number for new jobs creation in 2012. An earlier version had the wrong figure for August's unemployment rate.