Payroll growth declined sharply in August and September, raising questions of whether the jobs market was strong enough for the Federal Reserve to raise interest rates for the first time since 2006.

The U.S. only needs to create 85,000 jobs a month for the unemployment rate to hold steady at the current level of 5.1 percent, according to estimates by Goldman Sachs Group Inc. The New York-based bank had previously forecast that about 135,000 jobs were needed each month.

The prior estimate was in line with the average payroll growth of 139,000 for the past two months. The jobs numbers disappointed Wall Street economists who were looking for signs of a stronger labor market. Last year, the U.S. added 245,000 jobs a month.

The economy is still producing enough jobs to drive the unemployment rate lower, said Goldman economists Jan Hatzius and David Mericle in an October 19 report obtained by Newsmax Finance.

“We agree with Fed officials that the recent slower rate of payroll growth in the neighborhood of 140,000 per month is still enough to put downward pressure on the unemployment rate,” according to their report.

Federal Reserve officials in speeches this month provided estimates of how many jobs were needed for labor market health, according to Goldman.

Estimates of Break-Even Payroll Growth by Fed Officials

John Williams: Less than 100,000 a month
Stanley Fischer: Less than 140,000 a month
Jeffrey Lacker: Less than 100,000 a month
William Dudley: About 120,000 to 150,000 a month
Loretta Mester: 70,000 to 120,000 a month

One area of the economy that’s putting pressure on jobs growth is in industries that sell U.S.-made goods in other countries, according to a report by JPMorgan Chase & Co.

Export-driven industries lost about 50,000 jobs a month for most of this year, after adding 9,000 a month on average in 2014, said JPMorgan economist Jesse Edgerton.

Private payrolls growth may fall to about 150,000 a month, according to his estimates.
"Employment is declining in industries exposed to exports, and we haven’t seen any sign the decline is slowing down," Edgerton said. "The drag from job losses in export industries will linger on for some time at least."