US added 263,000 jobs, slowing from month earlier as inflation woes persist

The US labor market added 263,000 jobs in September — a slower pace than the previous month that shows a softening economy under President Joe Biden and stiff rate hikes by the Federal Reserve may finally be taking a toll on workers.

Nevertheless, the Bureau of Labor Statistics also said unemployment dipped to 3.5%, a 50-year low that reflects workers leaving the job market — and shows that the Fed still has its work cut out for it as it scrambles to tackle out-of-control inflation.

Average hourly wages rose 5.0% in September from a year earlier, a solid although slower pace than the 5.2% clip seen in August.

The latest numbers showed a slowed pace from August, when the US economy added 315,000 jobs. Economists had anticipated that the report would show that companies added 275,000 jobs and that the unemployment rate would hold at 3.7%.

The biggest employment gains came in the leisure and hospitality industries, which added 83,000 jobs. The healthcare sector added 60,000.

The Bureau of Labor Statistics claims unemployment has dipped to 3.5 percent.
The Bureau of Labor Statistics claims unemployment has dipped to 3.5 percent.
Bureau of Labor Statistics

September’s slowed hiring pace may be a relief for Fed Chairman Jerome Powell, who is trying to cool the economy enough to tame the worst inflation in four decades without sparking a recession.

Public outcry over high prices and the threat of a recession loom as President Biden’s Democratic Party struggles to maintain control of Congress in midterm elections next month.

Investors fear the Fed will stay on its current, hawkish course and continue to aggressively hike interest rates to beat back inflation, increasing the odds of a deeper recession. Dow futures were up nearly 100 points while the S&P 500 futures were flat. Nasdaq futures were trending downward.

In this April 13, 2020, file photo, people line up outside the Utah Department of Workforce Services in Salt Lake City.
Hourly wages have slightly decreased since 2021.
AP Photo/Rick Bowmer, File

Core inflation, which excludes volatile food and energy prices, increased by approximately 10% over the same period.

Last week, the Commerce Department released data showing that core consumer prices increased by 6.2% in August compared to the same month one year ago. The core PCE, which excludes volatile food and energy prices, increased by a hotter-than-expected 4.9% year-over-year in August, or by 0.6% compared to July.

Fed officials in recent days have signaled that the top priority for the central bank is taming inflation.

The strong jobs report makes it more likely Fed Chair Jerome Powell will stay on course and aggressively hike interest rates.
The jobs report makes it more likely Fed Chair Jerome Powell will stay on course and aggressively hike interest rates.
AP

“I want Americans to earn more money. I want families to have more money to put food on the table. But it’s got to be consistent with a stable economy, an economy of 2% growth” in inflation, Minneapolis Fed President Neel Kashkari said Thursday in comments cited by CNBC.

“Wage growth is higher than you would expect for an economy delivering 2% inflation. So that gives me some concern.”

Raphael Bostic, the president of the Atlanta Fed, said on Wednesday that he thinks inflation “is likely still in the early days” due to the tight labor market.

Applicants line up at a job fair at the Ocean Casino Resort in Atlantic City N.J., on April 11, 2022.
Economists fear the Federal Reserve could slow down the economy in order to tackle inflation.
AP Photo/Wayne Parry, File

Lisa Cook, a Fed governor, said that inflation remains too high and that “ongoing rate hikes” will be necessary.

Susan Collins, the new president of the Federal Reserve Bank of Boston, endorsed Fed projections released last month that signaled its benchmark interest rate would rise to 4.6% by next year, up sharply from about 3.1% now.

US unemployment continues to trend at near-record lows, according to the latest jobs figures.
US unemployment continues to trend at near-record lows, according to the latest jobs figures.
Christopher Sadowski

Getting inflation down will “require slower employment growth and a somewhat higher unemployment rate,” Collins said in a Sep. 26 speech to the Greater Boston Chamber of Commerce.

Cleveland Fed President Loretta Mester said the Fed’s short-term rate would have to stay higher for longer than previously expected, regardless of the uncertainties surrounding the economy, such as Russia’s invasion of Ukraine and ongoing supply chain difficulties.

With Post wires

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