US job growth returns; revision eliminates August drop

WASHINGTON : The US economy generated 110,00 jobs in September, the Labour Department said Friday, as it also revised its report from last month to show gains instead of losses.
The report on nonfarm payrolls, seen as one of the best gauges of economic momentum, suggested the world's biggest economy is holding firm in the face of credit and housing woes.
Significantly, the agency revised up its estimate for August to show a gain of 89,000 jobs, instead of a loss of 4,000 that had stunned analysts and fanned fears about a recession.
The agency said the US unemployment rate edged up to 4.7 percent from 4.6 percent as the number of job seekers increased.
The report would appear to ease fears that the economy made an abrupt turn downward in August amid a credit squeeze linked to fears about the sub-prime housing market.
Yet the average monthly gain for the third quarter was 97,000 jobs a month, down from 126,000 on average in the second quarter and consistent with a cooling economy.
The report last month showing the first drop in overall employment in four years prompted analysts to tear up their economic forecasts and was seen as a factor in the Federal Reserve's decision on September 18 to slash key interest rates by half a percentage point.
It was not immediately clear how the Fed would respond to the latest report, but Robert MacIntosh, chief economist for Eaton Vance, said the revised data suggests the central bank may have erred in easing rates so much.
"It means the Fed probably shouldn't have done what they did, that they should have waited," MacIntosh said.
"Those of us who were sceptical at the time now feel a little redeemed."

<------ Guess it is highly unlikely a fed cut will happen end of this month