The U.S. added 254,000 jobs in September, and the unemployment rate ticked lower to 4.1 percent, according to Labor Department data released Friday.
The September jobs report blew past economist expectations, which foresaw the addition of 140,000 jobs and a jobless rate of 4.2 percent.
The September jobs report comes roughly a month before the election, with Vice President Harris closing the gap on former President Trump on whom voters trust more to handle the economy.
President Biden touted Friday’s jobs report as “good news for American workers and families.”
“With today’s report, we’ve created 16 million jobs, unemployment remains low, and wages are growing faster than prices,” the president said in a statement. “Under my Administration, unemployment has been the lowest in 50 years, a record 19 million new businesses have been created, and inflation and interest rates are falling.”
He also lauded the “power of collective bargaining to lift up workers’ wages,” after the International Longshoremen’s Association (ILA) reached a tentative agreement with the U.S. Maritime Alliance (USMX) on Tuesday night to end a strike at East and Gulf Coast ports.
It also included upward revisions to the previous two months, with an additional 55,000 jobs added in July and another 17,000 in August. The adjustments bring the total job gains to 144,000 and 159,000, respectively.
The report comes just two weeks after the Federal Reserve opted to cut interest rates for the first time since it began its aggressive rate hike campaign more than two years ago.
The central bank slashed rates by 50 basis points to a range of 4.75 percent to 5 percent, as inflation comes within striking distance of the Fed’s target and the labor market shows signs of weakening.
“Looking at the labor market strength evident in September’s Employment Report, the real debate at the Fed should be about whether to loosen monetary policy at all,” said Paul Ashworth, chief North America economist at Capital Economics.
“Any hopes of a 50 [basis point] cut are long gone,” Ashworth added. “We continue to expect the Fed to take a more measured approach – cutting rates by 25 [basis points] at each meeting until the policy rate is down to between 3.00% and 3.25%.”
The Fed began its inflation flight as inflation spiked in early 2022, eventually reaching a 40-year high of 9.1 percent in June of that year. The central bank repeatedly raised rates through July 2023 and held rates steady until this September.
Inflation has eased significantly over the past two years. As of August, consumer prices were up just 2.5 percent year-over-year.
However, the labor market, which has remained remarkably strong in the face of the Fed’s rate hiking campaign, also began to show signs of weakening this summer. The July jobs report came in much cooler than expected, with just 114,000 jobs gained and unemployment rising to 4.3 percent.
The weakening led to some concerns that the Fed had waited too long to ease rates. However, Fed Chair Jerome Powell has pushed back on the suggestion the central bank was behind the curve.
“We don’t think we’re behind,” Powell said at a press conference following the rate cut decision last month. “We think this is timely, but I think you can take this as a sign of our commitment not to get behind.”
Despite weakening earlier this year, the job market “appears to be firming up,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.
“This should put to rest – at least for the next month – the idea that the economy is about to fall off a cliff or that imminent doom is on the horizon,” Zaccarelli said in a statement.
Updated at 9:25 a.m. EDT