The Labor Department also revised its estimates for job creation in July and August, with the combined total falling by 7,000. The nation has added 178,000 new jobs in the typical month this year, roughly double the pace necessary to keep up with population growth.
With a prolonged period of reliable hiring, the labor market has helped push the U.S. economy through an otherwise lackluster stretch. Layoffs are at a four-decade low, wages are rising, and consumers are steadily pumping their newly earned money back into the economy. But the country still faces significant challenges, including surprisingly paltry business investment, and the International Monetary Fund this week said it expected the nation’s economy to grow just 1.6 percent this year, the lowest mark in five years.
That’s left Americans, one month before the presidential election, with mixed signals about the health of their economy. More people in the United States are working than at any previous time during the seven-year recovery from the financial crisis. But the U.S. economy is expanding no faster than other advanced economies, and eye-catching gains in the labor market are becoming less frequent as the nation approaches full employment.
“The broader trend is slow and steady, which is fine for the purpose of wishing for a sustainable recovery,” said Mark Hamrick, a senior economic analyst at Bankrate.com.
Markets opened flat on the labor report Friday morning. The three major indices were slightly down at closing bell.
The pace of job creation in September was slightly below market expectations, but some economists said Friday morning that the data does little to change the Federal Reserve’s calculus about a potential interest rate hike in December.
The data also highlighted one encouraging aspect about the labor force: More people are being enticed to join it. The pool of Americans working or looking for work grew in September by 444,000 people, the largest gain since February, and the labor force participation rate rose to 62.9 percent.
That gauge of worker engagement is at low ebb not seen since the 1970s — a result of retiring baby boomers and middle-aged workers disenfranchised after the recession. But the participation rate, after hitting a low point last September, has started to gradually rebound.
“The strong labor market is attracting people from outside the labor force back into employment,” Fed chair Janet Yellen said last month.
In September, the most notable gains came in the professional and business services sector — a category that includes accountants, engineers and architects, and where the average hourly wage is $30.93. Those positions accounted for more than one-third of America’s job growth. Hiring in the health care and food services fields combined for another large portion. The mining sector — hammered amid two years of low oil prices — held steady in September, ending a 23-month streak of job hemorrhaging.
For all workers, the average hourly wage rose by 6 cents in September, and paychecks have grown 2.6 percent from a year ago. That is slightly above the annual pace of around 2 percent maintained during earlier years of the recovery.
Over the last year, several states and large corporations have enacted minimum-wage increases. Wages are also being driven up by the tighter labor market — conditions where workers are in greater demand and have more leverage to ask for pay raises.
As the United States nears full employment, the pace of hiring has slowed slightly this year. In 2015, the nation averaged 229,000 new jobs per month, and the unemployment rate fell from 5.7 percent to 5 percent. So far this year, the economy is adding roughly 182,000 new jobs per month; the unemployment rate began the year at 4.9 percent and has barely wavered since.
“The 5 percent unemployment rate still makes the U.S. the best house in a poor global neighborhood,” said Martin Jarzebowski, a senior investment analyst at Federated Investors. “We have to expect that employment rate will begin to moderate.”
The major presidential candidates, Democrat Hillary Clinton and Republican Donald Trump, have interpreted the economy in vastly different ways. Clinton has called for conventional tweaks — major infrastructure spending, a minimum-wage hike — and has said tax increases for the highest earners can create more equity.
Trump, meanwhile, says the U.S. government’s unemployment numbers are manipulated and artificially rosy. He says he will renegotiate or withdraw from major trade deals, slap import fees on imported products, lower taxes on businesses, keep more jobs at home, and improve U.S. gross domestic product growth to 3.5 percent.
"Today’s jobs report shows that the economy continues to create jobs and that wages continue to grow — but more work needs to be done,” Jacob Leibenluft, a senior policy adviser with the Clinton campaign, said in a statement.
The Trump campaign sent a fundraising e-mail on Friday morning saying that "Obama-Clinton" economic policies are “killing the American middle class.”
“The White House and the Clinton campaign will spin the numbers, pat themselves on the back for all the ‘success’ they’ve had on the economy, but Americans like you aren’t buying it anymore,” the e-mail said.