Era of Big Monthly Job Gains Appears Over, and Economists Say That’s a Good Thing

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hiringThe era of monthly payroll gains of at least 200,000 appears to be over after the Labor Department reported on Friday that job growth was lackluster again in September, but economists said that’s a good thing.

Although the 156,000 net new jobs added last month was down from August and a bit below analysts’ expectations, wage growth was solid and the labor force continued to expand.

Those are signs of a healthy labor market as more people come off the sidelines to look for jobs and employers have to boost pay to lure and retain workers, experts said.

So Friday’s report, which economists described as solid or steady, probably keeps the Federal Reserve on track to raise a key interest rate again before the end of the year.

The revisions mean that the average job gains this year have been about 178,000 a month, well below last year’s pace of 229,000.

In addition, the unemployment rate ticked up to 5 percent last month, the highest since April.

That was the bad news and added more fuel to Republican criticism of the economy as Election Day approaches.

David Malpass, senior economic advisor to Republican presidential nominee Donald Trump, called Friday’s jobs report “weak” and a sign that the policies of President Barack Obama and Democratic nominee Hillary Clinton were failing the nation’s workers.

“Americans desperately need more jobs and new economic policies, not the same-old, same-old offered by the Clinton campaign,” Malpass said.

Clinton senior policy advisor Jacob Leibenluft said the report “shows that the economy continues to create jobs and that wages continue to grow — but more work needs to be done.”

Clinton’s policies “would lead to real job growth, while Trump’s would risk another recession,” Leibenluft said.

The White House emphasized continued job growth and improving wages. And economists pointed to some key reasons why they thought the report was positive.

“The labor market is getting tighter. That’s good news, so we shouldn’t expect job growth of 200,000 per month,” said Gus Faucher, deputy chief economist at PNC Financial Services Group.

“The slowing in job growth from 2015 is expected,” he said. “It’s consistent with a labor market that is approaching full employment.”

Labor Secretary Tom Perez said he predicted in January that job growth would be slower this year as the labor market improved.

“As you get closer and closer to the summit of the mountain of full employment, you start to see trade-offs between the number of jobs you gain in a given month and wage growth,” he said.

But he cautioned that “we’re not at the summit and I don’t see the summit in sight.”

“I still believe we have more progress we can make,” Perez said.

(Source: TCA)