US Creates 142,000 New Jobs In September

The US saw 142,000 new non-farm jobs created in the month of September, well below the expected 201,000.

The unemployment rate in the country stayed flat at 5.1% which, when combined with the fact that new jobs have been created, shows the number of people searching for jobs in the US has altered.

As only 100,000 new jobs are needed each month to keep up with population growth the unemployment rate should have dropped in September.

But as the jobs creation data and the unemployment rate are derived from separate surveys, the figures released today do not reflect this.

More people have taken themselves out of the labour market, having retired or given up looking for work, meaning the participation rate has dropped to 62.4% - the lowest level it has reached in over 35 years.

Job creation rates for July and August were also revised lower, despite expectations that the numbers would be reviewed upwards due to weak summer reporting.

August alone dropped from 173,000 to 136,000, resulting in the smallest two-month increase in job creation the country has seen in over a year.

Wage data is also weak; average hourly earnings remained unchanged, against predictions of a 0.2% rise.

The non-farm payrolls report is released on the first Friday of every month and covers all US jobs except agricultural workers, private household staff and those working for non-profit organisations.

The figures could be seen as good news by investors as they are likely to delay even further a rise in interest rates in the US.

A rise had been expected last month but weak jobs growth along with global pressures such as the slump in the Chinese economy led to the Federal Reserve choosing to hold rates steady.

The chair of the Fed, Janet Yellen, had nonetheless indicated in recent weeks that she expected a rate rise to take place before the end of the year.

On the basis of the figures released today, the Federal Funds Futures Rate - which is seen as an indicator of when interest rates will increase - is now suggesting that may not happen until March of 2016.

But although this is likely to reassure investors it has not yet trickled through, with both the US stock index futures and the dollar down following the release of the report.