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The US added 194,000 new jobs in September, reducing the employment rate by 0.4 percentage points to 4.8% as of Friday. US Bureau of Labor Statistics report (BLS). However, this number was much lower than the expected job gains for that month.

“Job growth remained sluggish in September after similarly disappointing gains in August,” said Mike Fratantoni, chief economist at the Mortgage Bankers Association (MBA). “Although private sector job growth was 317,000, and several categories showed gains – including professional services – there was a major decline in education employment. This was still a byproduct of school recruitment being relatively weak compared to the usual seasonal pattern. “

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Fratantoni said the unemployment rate is below 5% and steady job growth, while lower than expected, will put the Federal Reserve on its way to end its economic stimulus as it watches the labor market closely. This means that interest rates are expected to rise steadily in the coming months if the labor force continues to grow and the COVID-19 delta version does not cause significant disruptions.

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Economic recovery not “dramatic enough”

Speaking about the September jobs report at a news conference Friday morning, President Joe Biden spoke about the success of the economy during his presidency and said the jobs report was positive news. However, he acknowledged the market’s expectations.

“Maybe it doesn’t seem dramatic enough,” Biden said. “I also want it to move faster, but we are making steady progress.”

According to the Labor Department report, there was little change in the labor force participation rate at 61.6% in September. However, some sectors, such as the public education sector, saw a decrease in general seasonal hiring because back-to-school rules differed from state to state. An economist said the report showed mixed signs of improvement in today’s unusual recruitment season, especially in the education sector.

“As in recent months, job gains were concentrated in service-providing sectors, specifically, leisure and hospitality (+74,000 jobs), professional and business services (+60,000 jobs), and retail business (+56,100 jobs). Jobs) sectors showed healthy gains last month,” said Doug Duncan, chief economist at Fannie Mae. “On the other hand, employment in the state, local and private education sectors fell 180,000 in September combined.

“Hirring in these sectors, while positive on a non-seasonally adjusted basis, was much lower than expected in September, resulting in seasonally adjusted job losses,” Duncan said. “This unusual seasonal pattern has been distorting the overall job growth picture for several months.”

The new level of employment in the report is likely to keep the central bank on track with plans to end its stimulus this year and perhaps even look at a hike in interest rates by 2022. Borrowers can save money before potentially increasing rates by refinancing their private student loans. Visit Credible to see multiple lender options at once And choose the one that best suits you.

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“There is much more to do, but great progress.”

Speaking about the jobs report, Biden said there was “much more to do, but great progress” in the road to recovery from the pandemic-induced recession.

One economist said a more positive report on recent employment changes would have been a better sign of recovery in the economy, but the forecast for the September report would still be good enough for the Federal Reserve.

“For many members of the Federal Reserve, a strong September jobs report would have met the employment test to begin asset purchases,” said Davit Kebede, senior economist at the Credit Union National Association (CUNA). “However, the decline in the unemployment rate could be enough for the Federal Reserve to begin slowing purchases of Treasury and mortgage-backed securities as early as next month.”

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