New York: US employment unexpectedly surged in September by the most since the start of the year, illustrating a durable labor market and bolstering the case for another Federal Reserve interest-rate hike.
Nonfarm payrolls increased 336,000 last month after sizable upward revisions to the prior two months, a Bureau of Labor Statistics report showed Friday. The unemployment rate held at 3.8 per cent, and wages rose at a modest pace.
The surprising vigor of the job market suggests companies remain confident about their sales prospects. While the pace of hiring has cooled since last year, its resilience remains a key source of strength for household spending and the broader economy.
For the Fed, however, the strength of the labor market threatens to keep upward pressure on inflation. The government figures, along with other data like the recent pickup in job openings, could tilt central bank officials toward another interest rate hike by year end.
Hiring was relatively broad-based, led by increases in leisure and hospitality, health care and professional and business services. Government payrolls also rose.
Treasury yields surged, while stock-index futures plunged and the dollar strengthened. Odds of another rate hike by year-end increased.
The figures added fuel to a selloff in government securities that has rapidly pushed up Treasury yields over the past month. In the long-run, the surge threatens to undercut the economy by driving up borrowing costs for consumers and companies.
Average hourly earnings increased 0.2 per cent last month and were up 4.2 per cent from a year earlier, the smallest annual advance since mid-2021. The average workweek held at 34.4 hours.