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The U.S. unemployment rate dropped below 6 percent in September, the lowest it's been since July 2008. Employers added 248,000 new jobs to their payrolls last month, according to the Bureau of Labor Statistics. As NPR's John Ydstie reports, it's a bounce-back from a disappointing jobs report in August.
JOHN YDSTIE, BYLINE: Laura Rosner, an economist at BNP Paribas, had expected hiring to bounce back in September. She says she got more than she expected.
LAURA ROSNER: You know, it was a positive report, better than we expected and better than the market expected with an upward revision to the prior month.
YDSTIE: August job gains were revised up to 180,000. When averaged with September's 248,000 thousand new jobs, it puts employment growth back on the year-long trend of about 215,000 jobs a month. As for the drop in the unemployment rate, Rosner says it's due partly to people leaving the labor force, but it's also the result of steady job growth. Jim O'Sullivan of High Frequency Economics agrees, and he thinks most of those leaving now are probably retirees.
JIM O'SULLIVAN: I think it's pretty unambiguous that employment growth is more than strong enough to keep the unemployment rate coming down. And indeed we saw another drop this morning to 5.9 percent.
YDSTIE: And as Sullivan points out, the number of people in the labor force has remained pretty constant so far this year. It's down just a tenth of a percent. During the same period, the unemployment rate has dropped to eight-tenths of a percent. Laura Rosner thinks the drop in the unemployment rate will put pressure on the Federal Reserve policymakers to begin raising interest rates.
ROSNER: I think that this solidifies the case for policymakers to really start normalizing policy around midyear in 2015. And it's really this missing piece, the lack of wage growth, that's allowing them to be perhaps more patient than they would otherwise have to be.
YDSTIE: Rosner is referring to the one disappointment in this report - hourly wage growth was essentially flat and has barely kept pace with inflation over the past year. Fed Chair Janet Yellen has made clear that's one of the factors that will determine when the Fed starts to raise interest rates. John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright NPR.
