The U.S. labor market is heading into the final quarter of the year at a stable pace as federal data is projected to show job growth slowing and the unemployment rate holding at 4.1% for a third month. The Labor Department’s Bureau of Labor Statistics will publish its employment report on Friday.
Forecasts for September nonfarm payroll increases range across estimates, with a Reuters survey of economists predicting an addition of 90,000 jobs, while a Dow Jones consensus looks for 84,000 and a Bloomberg survey expects 85,000. This anticipated moderation follows an August surge in nonfarm payrolls that economists partly attributed to government seasonal adjustment models.
Mixed Signals Emerge as Wage Growth Moderates
The expected downshift follows August’s figures, which included a larger-than-usual job count that analysts linked to model volatility and summer hiring trends. Wage growth has also moderated, with average hourly earnings expected to show a year-over-year increase of 3.1% to 3.2%.
However, mixed signals persist across the broader economy. Employee confidence fell to a record low in September according to a Glassdoor survey, and job placement firm Challenger, Gray & Christmas reported that year-end seasonal hiring is off to a slow start, even as layoff plans declined.
AI Infrastructure Supports Growth While Rate Hike Shifts
Within specific industries, fourth-quarter growth is supported by infrastructure buildouts and data center construction for artificial intelligence, driving continued gains in both construction and manufacturing payrolls.
Against this stable yet unspectacular labor picture, recent Federal Reserve commentary and data releases have influenced market expectations regarding monetary policy. While a solid jobs picture remains, some Fed commentary has shifted market expectations for a rate hike away from late October toward a more likely move in December. It remains unclear how long corporations will generate lower employment growth from vacancies, or when certain regulatory and immigration policy shifts will definitively register in the federal data.
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