US Expected to Report Moderate September Job Growth

The US labor market is expected to show moderate job growth in September, as indicated by recent ADP report data and other economic indicators. Private payrolls increased by 143,000 in September, exceeding expectations and signaling a rebound in hiring after five consecutive months of slower growth. This positive trend, however, is tempered by ongoing labor strikes and a softening labor market.

Ongoing labor strikes at Boeing and ports are expected to cloud the October job market outlook. If these strikes continue past mid-October, they could have a detrimental impact on payrolls for the month. This uncertainty highlights the delicate balance between labor market resilience and potential headwinds.

The softening of the labor market is evident in the rise in unemployment and the decline in job openings. Unemployment has risen steadily in recent months, while separate measures of job growth have cooled, prompting the Federal Reserve to cut interest rates in September by a larger-than-usual amount to stem further weakening. This moderation in labor market conditions is expected to continue in September, with the unemployment rate forecast to hold at 4.2%.

The Federal Reserve's interest rate cuts and the potential for further cuts are expected to influence job growth in September. The Fed is likely to lower interest rates when they meet next week, with a 25 basis point cut being the most likely outcome. This rate cut could provide some relief to businesses and consumers, potentially boosting hiring and economic activity.

In conclusion, the US labor market is expected to report moderate job growth in September, with private payrolls increasing by 143,000. Ongoing labor strikes and a softening labor market pose challenges to this outlook, but the Federal Reserve's interest rate cuts could provide some support. The expected job growth in September compares favorably to the average monthly gains over the past year, with industries such as leisure and hospitality, construction, and professional and business services expected to contribute the most to job growth. The unemployment rate is forecast to remain at 4.2%, reflecting the ongoing moderation in labor market conditions.