US job growth beats expectations ahead of presidential election

US President Joe Biden speaking during a news conference in the White House press briefing room. EPA

Job growth in the US smashed expectations last month and the unemployment rate dropped, data released on Friday showed, further reducing the likelihood of the Federal Reserve slashing interest rates before the end of the year.

The apparent resilience in the job market could also play a role in the November 5 election, where the top concern for US voters is the economy.

“From the very beginning, we were told time and again that the policies we were pursuing … weren't going to work … but we have proven them wrong,” Mr Biden told reporters, appearing in the White House briefing room for the first time since taking office in 2021.

“Simple fact is, we've gone from an economy in crisis to literally having the strongest economy in the world. But we've got more work to do.”

More than 250,000 jobs were created in September, President Joe Biden said, following an upwardly revised 72,000 advance over the previous two months, according to Bureau of Labour Statistics’ figures released on Friday. The unemployment rate fell to 4.1 per cent.

Combined with data earlier this week showing demand for workers is still healthy while layoffs remain low, the payrolls report is likely to alleviate concerns that the labour market is cooling too quickly.

The jobs figures may boost odds that Federal Reserve policymakers will reduce interest rates a quarter of a percentage point next month, after the 0.5 per cent cut at their September meeting.

The gain in hiring last month was driven by leisure and hospitality, as well as health care and government.

Most economists say the Fed appears to have achieved the once unlikely prospect of a “soft landing”– in which high interest rates help vanquish inflation without triggering a recession.

The economy is weighing heavily on voters as the presidential election nears. Many Americans are unimpressed by the job market’s durability and are still frustrated by high prices, which remain on average 19 per cent above where they were in February 2021.

That was when inflation began surging as the economy rebounded with unexpected speed and strength from the pandemic recession, causing severe shortages of goods and labour.

The public’s discontent with inflation and the economy under Mr Biden has been a political burden for Vice President Kamala Harris who has struggled to elucidate an economic plan in her race against former president Donald Trump.

With only a month until election day, Mr Biden said his administration will have to deal with the costs of Hurricane Helene, a powerful storm which has torn a path of destruction across the US south-east, killing at least 200 and taking a hefty economic toll.

“We're going to have to deal with unforeseen costs of what this hurricane costs,” Mr Biden said. “And I'm going to probably have to ask Congress that we need more money to deal with some of those problems.”

Bus drivers in Catskill in rural New York state start on about $55,000 per year, according to this advert. Bloomberg