U.S. employers slammed the brakes on hiring over the last two months and wages fell in September, raising new doubts the economy is strong enough for the Federal Reserve to raise interest rates by the end of this year.
Payrolls outside of farming rose by 142,000 last month and August figures were revised sharply lower to show only 136,000 jobs added that month, the Labor Department said on Friday.
That marked the smallest two-month gain in employment in over a year and could fuel fears that the China-led global economic slowdown is sapping America's strength.
"You can’t throw lipstick on this pig of a report," said Brian Jacobsen, a portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.
U.S. factories are feeling the global chill and shed 9,000 jobs in September after losing 18,000 in August, according to the Labor Department's survey of employers.
The recent pace of job growth should have been enough to push the unemployment rate lower because only around 100,000 new jobs are needed a month to keep up with population growth.
But the jobless rate held steady at 5.1 percent. The unemployment rate is derived from a separate survey of households that showed 350,000 workers dropping out of the labor force last month, as well as a lower level of employment.
The share of the population in the work force, which includes people who have jobs or are looking for one, fell to 62.4 percent, the lowest level since 1977.
Average hourly wages fell by a cent to $25.09 during the month and were up only 2.2 percent from the same month in 2014, holding around the same levels seen all year and pointing to marginal inflationary pressures.
Fed Chief Janet Yellen said last week the central bank would probably have to raise interest rates this year to keep the economy from eventually overheating. Investors have doubted that view and Friday's data made them less credulous a hike could come at the Fed's last policy meeting of the year in December.
"(With) a weak report here in combination with some of the other weakness that we are seeing across the globe, the odds get dinged for December," said Tom Porcelli, an economist at RBC Capital Markets.
Economists polled by Reuters had expected job growth of 203,000 in September.
All told, revised estimates meant 59,000 fewer jobs were created in July and August than previously believed.
In another grim sign, the number of hours worked in the country fell 0.2 percent, raising the specter that some broader softness might have gripped the economy last month.
One of the biggest lodestones on America's economy was in the commodity sector, which has slowed in part because of weaker demand from China.
The price of oil has fallen nearly 50 percent over the last year, and U.S. mining payrolls, which include energy sector jobs, fell by 10,000 in September, the ninth straight month of declines.
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