Job Growth Slows, Clouds Case for Fed Rate Hike

U.S. employment growth unexpectedly slowed for the third straight month in September, which could make the Federal Reserve more cautious about raising interest rates.

Nonfarm payrolls rose 156,000, down from a revised gain of 167,000 jobs in August, the Labor Department said on Friday.

Economists polled by Reuters had expected employers to add 175,000 jobs last month.

Fed Chair Janet Yellen has said the economy needs to create less than 100,000 jobs a month to keep up with population growth.Average monthly job gains have been about 180,000 this year, which Yellen has described as “unsustainable.”

The unemployment rate ticked up a tenth of a percentage point to 5.0 percent last month, though the increase was driven by Americans rejoining the labor force.

Friday’s employment report will be the last before the Fed’s Nov. 1-2 policy meeting. Investors see almost no chance of a rate increase at that meeting given how close it is to the Nov. 8 presidential election.

Republican presidential candidate Donald Trump has accused the Fed of playing politics by holding rates low, a charge Yellen and other Fed policymakers have denied.

Trump has also made reversing job losses at U.S. factories a central campaign promise. Manufacturing employment fell by 13,000 jobs in September and the sector has shed jobs in three of the last five months.

At the same time, the job market on balance continues to firm, even if at a slower pace, which could be an asset for Democratic presidential candidate Hillary Clinton who has argued that President Barack Obama, also a Democrat, has helped the economy.

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