American employers picked up their hiring pace unexpectedly in September while unemployment held steady, based on the latest data from the United States Labor Department.

The US economy added 336,000 jobs last month in the highest surge since January, while the jobless rate was unchanged at 3.8 per cent from the February 2022 high from the previous month of August. For now, the pace of hiring hovers above pre-pandemic levels and unemployment is still around a historically low level.

This is a signal that the American job market remains robust despite efforts by the Federal Reserve to cool the world’s biggest economy and lower inflation sustainably. The latest employment data update is adding pressure on policymakers seeking to cool the economy to leave borrowing costs at restrictive levels for a prolonged period.

Feds could consider further policy action

Arising from this data, Federal Reserve officials could consider further policy action. The number of unemployed individuals was essentially unchanged at 6.36 million people.

The so-called U-6 unemployment rate, which also includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment, edged lower to seven per cent. This, after touching a 15-month high of 7.1 per cent in August.

In the meantime, the labour force participation rate was also unchanged at 62.8 per cent, the highest since February 2020, according to the Labor Department. Analysts, however, have warned that the job market could weaken going forward, as it takes time for existing policy changes to ripple through the economy.

In September, sectors that saw job gains included leisure and hospitality, government as well as health care, said the Labor Department. A factor contributing to the latest increase was the education sector, with analysts at Pantheon Macroeconomics saying in a recent report that they expected a bounce in state and local education after surprisingly weak summer hiring.