The pace of U.S. job creation remained steady last month and participation in the labor force edged up as the labor market continued to move toward full employment.
The Labor Department said employers added 156,000 new jobs in September, down from an upwardly revised 167,000 in August and below analysts’ expectations of a gain of 172,000 jobs. The unemployment rate ticked up to 5% last month, the highest since April.
The average job gains this year have been about 178,000 a month, well below last year’s pace of 229,000.
But economists were upbeat about the report, saying it reflected the healthy trends of more people coming off the sidelines to look for jobs and employers boosting pay to lure and retain workers.
“The slowing in job growth from 2015 is expected,” said Gus Faucher, deputy chief economist at PNC Financial Services Group, told the Los Angeles Times. “It’s consistent with a labor market that is approaching full employment.”
The labor force expanded by about 444,000 people and the overall participation rate rose to 62.9 percent, above the low point of 62.4% last September. “The economy needs only about 80,000 to 100,000 jobs a month to keep up with growth of the population and labor force, so job gains above that level are enough to continue to eat into unemployment,” the LA Times noted.
As far as wages, average hourly earnings increased by six cents to $25.79 after just a two-cent increase in August. For the 12 months through Sept. 30, average hourly earnings have risen 2.6%, well above the low inflation rate and an improvement over the annual pace through the end of August.
“The broader trend is slow and steady, which is fine for the purpose of wishing for a sustainable recovery,” Mark Hamrick, a senior economic analyst at Bankrate.com, told the Washington Post.
Michael Gapen, chief U.S. economist at Barclays, said attributed most of September’s dip in job creation was due to an unexpected 11,000 drop in government payrolls. “It’s not a negative signal,” he told The New York Times. “We see the miss as mainly a one-off government issue.”