From CNN's Alicia Wallace, Elisabeth Buchwald, Nicole Goodkind and Krystal Hur
US job growth heated up in September, adding 336,000 positions, according to data released Friday by the Bureau of Labor Statistics.
Last month's job gains were far higher than expected and above August's total of 227,000.
While September marks the 33rd consecutive month of job growth for the United States, the Federal Reserve has been aiming to slow the economy and cool down the labor market.
For much of the past 18 months, the unemployment rate has drifted between 3.4% and 3.7%, a historically low range that stood in defiance to the barrage of Federal Reserve interest rate hikes and expectations for increased joblessness.
In August, the unemployment rate unexpectedly jumped 0.3 percentage points to 3.8%. And while monthly data and the unemployment rate itself can be quite volatile, a driver behind the increase was a welcome one: an increase in labor force participation.
“How much of that was noise?” said Nick Bunker, head of economic research for the Indeed Hiring Lab, adding that if monthly job gains remain north of 100,000, “how many more [people] can that pull into the labor force?”
Labor force participation plummeted during the early stages of the pandemic, but during the past year, more people have returned to the labor force.
The overall labor force participation rate rose to 62.8% in August, BLS data shows. That’s the highest it’s been since the onset of the pandemic.
How much higher it can climb is unknown: Even before Covid was in play, labor force participation was trending downward, largely due to the massive Baby Boomer generation aging out of the workforce.
“Can job openings drop and labor force participation rise at the same time?” Bunker asked, noting that the latter likely “doesn’t have enough power to fight back against the extremely powerful force of demographics.”
US stock futures are slightly higher Friday morning — but that could all change at 8:30am ET when the jobs report is due. Investors have been especially sensitive lately to data that paints the picture of a resilient US economy. Strong reports have lifted soaring bond yields and raised the specter of a more aggressive Federal Reserve.
Stocks closed relatively flat on Thursday as bond yields dipped and traders shifted their focus to key labor market data out on Friday morning. The upcoming jobs report could provide insight about whether the Fed will keep interest rates higher for longer at their policy meeting later this month.
Friday’s jobs report is expected to show that 170,000 jobs were added to the economy in September (that’s a cooling from the estimated 187,000 net gain in August) and that the unemployment rate ticked down to 3.7% from 3.8% the month prior.
The numbers come after a week of mixed data, painting an unclear picture of the labor market.
On Tuesday, the JOLTS report showed that the number of available jobs unexpectedly rose higher in August. That caused a market plunge. The Dow lost 454 points, or 1.3%, notching its biggest decline since March and turning negative for 2023. The S&P 500 and Nasdaq dropped 1.4% and 1.9% respectively.
A day later, ADP's national employment report showed that private-sector employers scaled back their hiring efforts far more than expected.
While a strong jobs report is seen as a sign of a strong economy and a good thing for Main Street, it exacerbates anxiety on Wall Street that the Fed will continue its aggressive interest rate hikes to rein in inflation.
Treasury yields, meanwhile, pulled back from their highest levels since 2007 following the release of the data. The 10-year fell to 4.71% after reaching 4.8% on Tuesday.
—CNN's Matt Egan contributed to this report.
From CNN's Nikki Carvajal and Kayla Tausche
President Joe Biden is expected to tout what the White House is calling the “unprecedented turnaround in America’s manufacturing leadership” and “our strong jobs market thanks to Bidenomics” when he speaks at the White House Friday morning – as job creation has shown signs of slowing and the White House tries to combat negative polling on Biden’s handling of the economy.
Biden will give remarks on jobs day and National Manufacturing Day and kick off the third Investing in America tour, White House Assistant Press Secretary Michael Kikukawa said in a statement.
The White House has been pushing the “Bidenomics” message for months – even as the economy has showed signs of possible strain due to high interest rates, nationwide labor strikes, and student loan repayments starting up for the first time in more than three years less than a week ago.
According to a Marquette Law School survey released Thursday, the message is not yet resonating with Americans.
Among all registered voters, half (50%) say former President Donald Trump would do a better job of handling inflation, with 27% saying Biden would, and the rest trusting neither candidate on the issue or seeing little difference between the two.
Trump also holds substantial leads on trust to handle the economy (52% trust Trump more, 28% trust Biden more) and job creation (49% Trump, 30% Biden).
This time last week, the prospects seemed to be growing dimmer that the September jobs report would land this Friday as planned.
A government shutdown would have forced the Bureau of Labor Statistics to go dark and result in the blackout of critical economic data.
But after a last-minute deal in Washington, the key labor market data is now set to flow as it should.
Whether it ultimately meets expectations is another question entirely.
At 8:30am ET, economists are forecasting that US employers added 170,000 jobs last month, according to Refinitiv data.
While that is a definite step back from the estimated 187,000 jobs added in August, it’s only slightly below pre-pandemic levels. From 2010 to 2019, the US added 183,000 jobs per month on average.
Economists also estimate that the unemployment rate will inch back down to 3.7% from 3.8%.
“The labor market still is solid,” Nela Richardson, chief economist with payroll processor ADP, told CNN in an interview. “It’s slowing, but there is no indication that it’s breaking.”
While Friday’s report will deliver a host of critical info about the nation’s job market, one of the biggest stories in labor might not be fully on display.
There are more than 25,000 United Auto Workers union members on strike at Detroit’s Big Three automakers of Ford, General Motors and Stellantis, and more than 3,300 members have been laid off or furloughed to date.
While some of the impacts are starting to be seen at local workforce centers and in state unemployment claims, the effects of the UAW strike will be largely muted in Friday’s jobs report, economists say.
The UAW strike started on September 15, which is at the tail end of the reference periods for both of the surveys that make up the monthly employment report. The reference periods for the household and establishment surveys are generally the calendar week that includes the 12th day of the month and the pay period that includes the 12th day of the month, respectively.
Workers who worked or received pay for that pay period, even if it’s just for 30 minutes, are counted as employed by the Bureau of Labor Statistics.
“We won’t see the direct impact probably until the October [jobs] report,” Bunker told CNN.
Separately, the SAG-AFTRA strike involving 16,000 actors should not have a noticeable impact on the information sector, as striking employees were already counted as unemployed in the August jobs report, noted Lydia Boussour, EY’s senior economist.
“Overall, there were only 1,700 net new workers on strike in September, according to the latest BLS strike report,” she said.
Still, the UAW strike could have ripple effects on employment outside of the Big Three as other companies within, or ancillary to, the auto industry could lay off workers as a result of slowing or canceled orders.