The U.S. economy added a modest 136,000 jobs in September, sending the unemployment rate to a nearly 50-year low, a mixed bag that some economists said was more evidence that the country could be headed for a slowdown.
The pace the government reported Friday is well below average monthly growth last year, though the unemployment rate of 3.5% was the country's lowest since 1969. Consumer spending continues to help pace the economy, even as business investment has pulled back.
"It's kind of a mixed picture," said Douglas Kruse, an economist at Rutgers University and a former White House adviser under President Barack Obama. "The job growth was less than what Wall Street and economists were expecting, but the drop in the unemployment rate was unexpected."
Manufacturing has already entered a decline. The new report, issued by the Bureau of Labor Statistics, showed that the economy lost 2,000 manufacturing jobs in September, something that is expected to be a particular focus for presidential candidates next year as both parties try to appeal to blue-collar workers.
The National Retail Federation warned Thursday that economic uncertainty, new tariffs and fluctuations in the stock market could derail Americans' spending plans in the run-up to the holidays. Retail lost about 11,000 jobs, driven by employment declines at clothing stores. Some other sectors performed much better, however, as health care and business services added more than 70,000 jobs combined.
Nick Bunker, an economist at the jobs site Indeed, said the lower unemployment rate was a good sign but that other economic indicators complicated the picture. Of particular note, he said, was that wage growth slowed from 3.2% to 2.9% in September.
"You would expect wage growth to be much stronger given this unemployment rate," he said. Economists have puzzled over why wage growth has remained modest since the recession despite the falling jobless rate.
"There's just been a large pool of people out there who are available to be employed without raising wages, but that just can't keep going on," Kruse said. "We're hitting the point where we're going to have to see wage growth, or employers aren't going to find workers they need."
Bunker said the slowing wage and payroll growth made for a concerning picture.
"Those two trends are a sign that is a labor market that is slowing down," he said. "Not because we're hitting full employment, but rather this is a slowdown for employers and a slackening in economic growth."
The employment rate of prime working-age Americans is strong, but it is still lower than levels seen at the end of the 1990s, Bunker noted.
Economists also point to other signs, including a manufacturing recession, that are affecting employers as they struggle to find workers in a tight jobs market.
President Donald Trump is trying to focus part of his 2020 re-election campaign on the strength of the economy, and he immediately cheered the low unemployment rate.
"Breaking News: Unemployment Rate, at 3.5%, drops to a 50 YEAR LOW," he wrote on Twitter. Then he appeared to add sarcastically, "Wow America, lets impeach your President (even though he did nothing wrong!)."
As the unemployment rate has fallen to historic lows, economists have watched wage data closely to see whether a tight labor market would eventually lead to higher income levels. A prime focus, both for business leaders and political leaders, continues to be the slump in manufacturing.
September was the worst month for U.S. manufacturing since June 2009, according to a closely watched industry index. And concerns have grown that the manufacturing contraction could spill over into other industries. Economists have begun warning about a significant risk of a recession.
The labor-force participation rate — the percentage of people older than 16 who are working or actively looking for work — remained steady at 63.2%, a number that is below historic averages and prerecession levels.
Monthly job growth averaged 223,000 in 2018 but has fallen this year to 161,000. The economy is a subject of particularly intense scrutiny heading into an election year.