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U.S. employers added twice as many jobs as expected

JUANA SUMMERS, HOST:

The U.S. job market delivered another big surprise today. Employers added a whopping 336,000 jobs in September. That is the biggest jump in eight months. Job gains for July and August were also revised up. NPR's Scott Horsley is here with more on what this means for the broader economy. Hey, Scott.

SCOTT HORSLEY, BYLINE: Hi, Juana.

SUMMERS: So Scott, tell us - where did all of these unexpected jobs come from?

HORSLEY: You know, it's really broad-based. We saw jobs added in pretty much every industry - even those like construction and manufacturing that ordinarily get clobbered when interest rates go up the way they have been. There were big job gains last month in health care and education, and we hit a milestone in hospitality. Bars and restaurants added 61,000 jobs last month, and that means that industry is finally back to having as many workers as it did before the pandemic. I checked back in with Laurie Torres, who owns Mallorca restaurant in Cleveland. The last time we'd spoken, Torres was having trouble finding enough people to help wash dishes. She says the picture is a lot brighter now.

LAURIE TORRES: Not that I don't enjoy washing a good dish once in a while - it's very peaceful back there and quiet. But, you know, I'm not having problems finding people in the kitchen. I'm having more and more people coming in asking for positions as server and busser - and particularly right now as the holidays approach.

HORSLEY: Torres says some workers who had left the restaurant industry to work in warehouses or someplace else are now finding their way back to restaurants, and that's partly because wages in the restaurant business are up about 13% from two years ago.

SUMMERS: OK. And what about wages overall? What's happening there?

HORSLEY: They're still going up, but not as fast as they had been. Average wages in September were up 4.2% from a year ago, and they rose just two-tenths of 1% between August and September. Now, that slowdown in wage growth could give some comfort to the Federal Reserve that, even with all these new jobs, the labor market is not overheating in a way that might add to inflation. It's certainly not going cold, but it's not boiling over either. Economist Julia Coronado, who heads MacroPolicy Perspectives, says this is really a Goldilocks scenario.

JULIA CORONADO: Wage growth is not accelerating. It's decelerating. But the good news for consumers is that it's been outpacing inflation this year. So that's the sweet spot. The Fed could not ask for a better combination of data than this.

HORSLEY: When this report from the Labor Department first came out this morning, the stock market tumbled as investors worried that all those new jobs might prompt the Federal Reserve to raise interest rates again. But once investors dug a little deeper and saw that wages are not increasing too rapidly, they got a little bit less worried about the Fed, and the market turned around. The Dow Jones Industrial Average actually ended up for the day nearly 300 points.

SUMMERS: OK. What about the unemployment rate?

HORSLEY: It's holding steady at 3.8% - same as it was in August. Unemployment has gone up a little bit since the springtime, when it bottomed out around 3.4%. But it's still really low by historical standards. In August, we did see a big influx of new workers coming off the sidelines, and that's one reason employers are having an easier time hiring. That's actually good news because if you have more people in the job market, then you can grow the economy without sparking inflation.

SUMMERS: About 25,000 autoworkers are on strike, and the union said this afternoon that it is not expanding the walkout for now, but could change in the days to come. How does that affect all of these jobs numbers we've been talking about?

HORSLEY: Yeah, today's report is from a jobs tally that was taken in the middle of September, just before the UAW walkout. So it doesn't reflect those striking workers or the autoworkers who've been laid off because of the job action. It also doesn't reflect the recent resolution of the Hollywood writers' strikes. Now, those will show up in the October jobs report, especially if the UAW strike goes on for a while. The big takeaways today, though, are we have more jobs, more workers and wages that are going up fast enough to boost workers' buying power, but not so fast as to fuel inflation.

SUMMERS: NPR's Scott Horsley, thank you.

HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.