Solid jobs report: little fodder for Fed, politicians

Last Updated Oct 7, 2016 10:04 AM EDT

The U.S. added 156,000 jobs in September, the Labor Department said Friday. The unemployment rate, which has held at 4.9 percent since the spring, inched up to 5 percent as the labor participation rate edged higher.

Those who may have been discouraged feel like they can find a job,” JJ Kinahan, chief strategist at TD Ameritrade, told CBS MoneyWatch. “It’s another bullet in the gun for the Fed. “

The less-than-projected gain last months follows a 167,000 rise in August that was more than previously estimated.

Federal Reserve Chair Janet Yellen has said to maintain pace with population growth, the U.S. economy has to create less than 100,000 jobs each month, and that the yearly average of about 180,000 monthly additions is not sustainable.

“It’s a very solid report, with America’s demographics, gains of around 100,000 per month should be viewed as pretty good,” said Carl Tannenbaum, chief economist at Northern Trust. “However, if you’re looking for a very strong performance or a very weak performance, you’d have a very hard time finding evidence in this report.”

 Economists had predicted that the government report would show that the economy added 175,000 jobs and that unemployment would remain at 4.9 percent for a fourth month, according to FactSet, a data provider.

Friday’s data did little to curb thinking that the Fed would hikes interest rates this year, with traders pricing in at more than 60 percent the odds of borrowing costs rising in December. 

 “The Fed can keep going, so to speak, with their intent to raise rates in December,” said Kinahan.  

Among the bright spots in the report: average hourly earnings rose 0.2 percent in September, lifting the wage increase over the last 12 months to 2.6 percent.

“We were growing at about 2 percent a year ago, so we’ve seen some advance in wages,” said Tannenbaum, who also noted a three-month advance in the participation rate, now “just shy of this year’s high.”

The September jobs report is one of the last high-profile readings on the economy before the Nov. 8 presidential election between Hillary Clinton and Donald Trump. The October employment report will be issued Nov. 4.

The presidential candidates have sketched out two sharply conflicting views of the economy’s health and the best ways to accelerate its growth.

Trump focuses on the loss of manufacturing jobs, for which he blames badly negotiated trade agreements. The Republican nominee also points to what he calls excess regulation for stifling businesses and holding back hiring. He pledges to renegotiate or withdraw from the trade pacts and reduce regulation.

Clinton notes that 15 million jobs have been created since the economy bottomed in 2010. Still, she supports additional infrastructure spending to try to accelerate growth and hiring. And she wants to make college more affordable and community college free, to improve more Americans’ skills.