U.S. job growth strong in September as labor market forges ahead

U.S. employers hired more workers than expected in September, while the unemployment rate dropped to 3.5%, pointing to a tight labor market which keeps the Federal Reserve on its aggressive monetary policy tightening campaign for a while.

Though the 0.2 point decline in the jobless rate from 3.7% in August was partly because of people leaving the workforce, the Labor Department's closely watched employment report on Friday also showed fewer Americans working part-time for economic reasons last month. The labor market continues to show resilience despite the Fed's stiff interest rate hikes.

"The labor market isn't just rolling along, it's a virtual steam-roller that does nothing to slow economic demand and help the Fed in its inflation fight," said Christopher Rupkey, chief economist at FWDBONDS in New York.