Solid US Job Growth in September; unemployment rate falls

US employers hired more workers than expected in September, while the unemployment rate fell to 3.5%, pointing to a tight labor market that is keeping the Federal Reserve on its aggressive monetary policy tightening campaign. for a while.

Nonfarm payrolls increased by 263,000 jobs last month, the Labor Department said Friday in its closely watched employment report. August data was not revised to show 315,000 jobs added as previously reported.

The economists surveyed by Reuters they had forecast 250,000 jobs, with estimates ranging from 127,000 to 375,000.

The unemployment rate stood at 3.7% in August.

With the labor market still tight, wage gains remained strong. Median hourly earnings rose 0.3% after a similar rise in August. That reduced the annual increase in wages to 5.0% from 5.2% in August. The Atlanta Fed’s wage tracker, which controls for composition effects like skill level, occupation and geography, is above 6%.

The labor market has largely withstood higher borrowing costs and tighter financing conditions, and economists say companies are reluctant to lay off workers after hiring difficulties last year as the COVID-19 pandemic 19 forced some people out of the workforce, in part due to prolonged illness caused by the virus.

While this week’s government data showed job openings fell by 1.1 million, the biggest decline since April 2020, to 10.1 million on the last day of August, there are still 4 million more job openings than unemployed Americans. . An Institute for Supply Management survey on Wednesday also showed that several service industries reported labor shortages in September.

But with headwinds from higher borrowing costs and slowing demand, economists expect companies to cut hiring significantly, with negative payrolls likely next year. Economists say companies have been filling vacant positions as they struggled to expand headcount to meet increased demand for their products, boosting job creation.

The US central bank raised its policy rate from near zero earlier this year to the current range of 3.00% to 3.25%, signaling last month that bigger hikes were on the way this year.

Next Thursday’s September consumer price report will also help politicians assess their progress in the battle against inflation ahead of their November 1-2 policy meeting.

Financial markets have almost priced in a fourth 75 basis point rate hike at that meeting, according to FedWatch Tool of CME.

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