( Spanish) –– The fever of the labor market in the United States has not yet completely subsided: the economy added 263,000 jobs in September, which represents a reduction compared to 315,000 in August, according to the report of the Bureau of Labor Statistics (BLS).
While the figure is solid, it also marks the second straight month of falling totals, pointing to a contraction in the labor market. A result that, precisely, the Federal Reserve seeks while battling with an inflation not seen in decades.
“The labor market is contracting calmly, moderating jobs and uncomplicated wage growth, as the Federal Reserve looks for signs of cooling inflation,” Daniel Zhao, chief economist at Glassdoor, said in a statement. “The labor market is doing its part by keeping job gains positive and moderating wage gains.”
Still, one issue that worries the Fed is labor force participation, said Julia Pollak, chief economist at ZipRecruiter. Having a higher proportion of people in the workforce may help slow wage growth, one of several factors Federal Reserve officials fear could keep inflation high. The September report showed that the labor force participation rate fell to 62.3% compared to 62.4% the previous month.
“There was hope that the reopening of schools could be a great moment” for many of the people who dropped out of the workforce during the pandemic to return to work, Pollak told Business. “We may not see some of the people who left.”
The unemployment rate fell again to 3.5%, a half-century low, from 3.7% previously, as a result of the decline in the number of job seekers.
“The Federal Reserve looks at this and other labor market data, coupled with still-strong inflationary pressures, and will continue to believe it needs to raise interest rates,” Mark Hamrick, chief economic analyst at Bankrate, said in a statement.
“That seems to be a certainty for the next meeting in early November. The magnitude of future rate increases will become clearer as we get closer to the last two meetings. [de formulación de políticas] of the year,” he said.
The Fed meets on November 1-2 to discuss monetary policy and is expected to raise its benchmark interest rate by three-quarters of a percentage point for an unprecedented fourth consecutive time.
