US Hiring Slowed to a Crawl in September, and Earlier Months Got Weaker Too

Keypoints:

• US employers added 29,000 jobs in September
• Analysts had expected about 90,000
• July and August were revised down by a combined 60,000
• July now shows a loss of 10,000 jobs
• Wage growth cooled to a 3% yearly pace

The US economy added 29,000 jobs in September, well below the roughly 90,000 analysts expected. The report came out on 2 October.

The revisions sting as much as the headline. The government cut its estimate for the prior two reports by a combined 60,000. July now shows a loss of 10,000 jobs, and August was revised to a gain of 133,000. August's first print was 162,000. Initial payroll estimates rest on incomplete survey responses, so later revisions can change the story.

Job openings had already pointed the same way. They fell to 7.097 million in August, below the 7.228 million economists expected. July's figure was revised down to 7.335 million. Openings tend to move before actual hiring does.

Wage growth cooled as well. Average hourly earnings rose 0.1% for the month, after 0.3% in August and a forecast of 0.3%. The yearly pace slowed to 3% from 3.1%, below the 3.2% economists forecast.

Markets read the report as good news for borrowing costs. Major indexes jumped early as yields sagged, and KB Home rose 5% as lower yields appeared to help housing stocks. Slower hiring and softer wages tend to ease inflation pressure. That usually weakens the case for higher interest rates.

Prices tell a different story. The manufacturing survey's prices paid index came in at 77.9 on 1 October, well above the 72.3 economists expected. Cooling hiring and firm input costs pull policymakers in different directions.

One weak month rarely makes a trend. A run of revisions that all point the same direction is harder to dismiss. Watch next month's report to see whether the revisions keep pointing lower.