The U.S. Labor Department announced on Friday that nonfarm payrolls rose by 194,000 in September after a revised 366,000 gain in the prior month (originally an advance of 235,000). This was the smallest monthly advance so far this year. Since a recent trough in April 2020, nonfarm employment has increased by 17.4 million but is down by 5.0 million, or 3.3 percent, from its pre-pandemic level in February 2020.

According to the report, notable job gains were recorded in occurred in leisure and hospitality (+74,000), professional and business services (+60,000), retail trade (+56,000), and transportation and warehousing (+47,000). At the same time, employment in public education (-161,000) declined over the month.

The unemployment rate decreased to 4.8 percent in September from 5.2 percent in August. This was the lowest rate since March 2020. Still, the rate remained well above the pre-crisis level of about 3.5 percent.

Economists had forecast the nonfarm payrolls to increase by 500,000 and the jobless rate to slip to 5.1 percent.

The labor force participation rate edged down to 61.6 percent in September from 61.7 percent in the previous month, while hourly earnings for private-sector workers rose 0.6 percent m-o-m (or $0.19) to $30.85, following a revised 0.4 percent m-o-m gain in August (originally a climb of 0.6 percent m-o-m). Economists had forecast the average hourly earnings to rise 0.4 percent m-o-m in September. Over the year, the average hourly earnings jumped 4.6 percent in September, following a revised 4.0 percent jump in August (originally a surge of 4.3 percent).

The average workweek increased 0.2 hour to 34.8 hours in September, being slightly above economists' forecast for 34.7 hours.