AUDIE CORNISH, HOST:
It's been another wild week on Wall Street. The Dow Jones Industrial Average tumbled more than a thousand points in two days earlier this week, but today the market gained some of that back. In fact, the Dow surged more than 370 points after the Labor Department reported the lowest unemployment rate in nearly 50 years. So the job market keeps chugging along despite signs that the overall economy is slowing. NPR's Scott Horsley is here to tease it out for us. Welcome back to the studio.
SCOTT HORSLEY, BYLINE: Good to be with you, Audie.
CORNISH: We've been talking about low unemployment for a long time, and today we learned it's even lower. So help us understand what's happening.
HORSLEY: Audie, let me take you back to December 1969. That's how far back you'd have to go to find an unemployment rate as low as we've got right now.
CORNISH: Oh, we're really going back.
HORSLEY: Three and a half percent. That's right. Diana Ross and The Supremes were topping the charts.
(SOUNDBITE OF SONG, "SOMEDAY WE'LL BE TOGETHER")
DIANA ROSS AND THE SUPREMES: (Singing) Someday we'll be together.
HORSLEY: Today's report was supremely good when it comes to the unemployment rate. But the jobs picture, Audie, that was a little bit less rosy.
CORNISH: OK, so why? And what are we seeing on the jobs front?
HORSLEY: Employers added 136,000 jobs in September. That's certainly not bad after nearly nine years of steady job growth. We also learned that job gains in July and August were a little bit stronger than initially reported. But Chief Economist Constance Hunter, who's with the big accounting firm KPMG, says even when you add in those extra jobs, we're still seeing a slower pace of hiring now than we were at this time last year.
CONSTANCE HUNTER: A large number of people are employed, which is in part a function of the length of the expansion that we've had. But under the surface lurk some concerns.
HORSLEY: Those concerns include not only slower job growth, but we also saw a bit of a slowdown in wage growth last month. Average wages rose just 2.9% in September. And if you combine slower job growth with smaller pay raises, you could eventually see a slowdown in consumer spending. That would be worrisome because right now it's the U.S. consumer who's been the strongest pillar propping up the economy at a time when business investment and global demand has been waning.
CORNISH: Now, we mentioned the big stock selloff earlier this week. What's triggered that? And don't set it to "Old Town Road." We're here now.
HORSLEY: We got a report on Tuesday that showed manufacturing activity had shrunk for the second month in a row. Factories are definitely feeling the fallout of the president's trade war as well as slumping demand in other countries. We saw another 2,000 manufacturing jobs disappear last month. We're also seeing some signs of a slowdown in the services side of the economy which employs a lot more people, everybody from stockbrokers to nurses to truck drivers. Services are not contracting like factories are, but they are growing more slowly, and you can see that in the jobs numbers as well.
CORNISH: What's behind the rebound in stocks then?
HORSLEY: Some investors may be looking at this jobs report and breathing a sigh of relief that we're not slipping into a recession. Others could be betting that the Federal Reserve will look at this jobs report, see some weakness and decide it's time for another cut in interest rates. Either way, Wall Street wins. Fed Chairman Jerome Powell was speaking here in Washington earlier today. And while he didn't tip his hand on interest rates, he did say that he and his colleagues are committed to keeping this economic expansion alive as long as they can.
(SOUNDBITE OF ARCHIVED RECORDING)
JEROME POWELL: People from low and moderate income communities tell us that this long recovery - now into its 11th year - is benefiting them and their neighbors to a degree that has not been felt for many years. And people who have struggled to stay in the workforce in the past are getting new opportunities.
HORSLEY: Strong job growth has been pulling people off the sidelines, including, Audie, people without a high school degree, for example, people who have a criminal record. That's encouraging. The White House says about three quarters of the people who found work last month had never worked before or had given up on the job market and are now coming back in.
CORNISH: That's NPR's Scott Horsley. Scott, thanks for explaining it.
HORSLEY: You're welcome.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.