The US unemployment rate hit 30-year lows in September as employers added to their payrolls at a moderate rate, the government said yesterday. This called into question beliefs that the job market had been softening.
The jobless rate fell to 3.9 per cent, its lowest level since April which, in turn, was the lowest since 1970. August's jobless rate was 4.1 per cent.
Those on payrolls outside the farm sector rose by 252,000, rebounding from a revised 91,000 jobs drop in August. The government previously said August payrolls fell by 105,000.
"The numbers are generally quite strong," said Mr Alan Ruskin, research director at 4CAST in New York. "The only point of weakness is in the manufacturing sector. In the meantime the [average hourly] earnings data looks quite subdued."
The payroll data was in line with the forecasts of US economists in a Reuters survey who had, on average, expected a September jobs gain of 232,000.
But the lower jobless rate signalled an unforeseen tightening in the labour market, as economists had expected the jobless rate to hold at 4.1 per cent.
As the rate drifted slightly higher recently, economists thought the red-hot labour market might be cooling in response to the six interest-rate rises from the Federal Reserve between mid-1999 and May this year.
Fed officials, in an interest rate-setting meeting on Tuesday, cited the scarcity of workers as a possible risk for inflation but decided to keep interest rates unchanged.
The payroll data seemed to back up the scenario of a slowing economy, as the trend for private payrolls had shown less robust hiring.
Mr Kevin Logan, economist at Dresdner Kleinwort Benson North America in New York, said the data would probably change the view, held by some in the financial markets, that the Fed's next move could be a cut in interest rates.
Average hourly earnings, a gauge of wage inflation, rose a modest 0.2 per cent in September against Wall Street forecasts for a 0.3 per cent rise. The average working week for private-sector employees rose to 34.4 hours from 34.3 in August.
