The US economy created jobs at a much slower pace than expected in September, and while the sharp decline in government employment significantly curtailed overall, there were pessimistic signs of economic conditions.
The Ministry of Labor reported Friday that non-farm payrolls increased by just 194,000 a month, compared to Dow Jones’ estimated 500,000. The unemployment rate fell to 4.8%, above expectations of 5.1%, the lowest since February 2020.
The number of headlines was hit by a 123,000 decrease in government salaries, but a 317,000 increase in private salaries. The decline in the unemployment rate was caused by a decrease in labor force participation. The more comprehensive number, including discouraged workers and workers working part-time for financial reasons, dropped to 8.5%, also the lowest in the pandemic era.
Total employment was sluggish, but wages soared. With a monthly increase of 0.6%, it increased to 4.6% year-on-year.
Leisure and hospitality once again led job creation, adding 74,000 positions. Professional and business services contributed 60,000 and retail increased by 56,000.
The report is at a critical time for the economy, and recent data show a solid mix of consumer spending despite rising prices, growth in manufacturing and services, and rising housing costs. ..
The Federal Reserve Board is closely watching the number of jobs. Central banks have recently shown that inflation has reached and exceeded the Fed’s 2% target and is ready to withdraw some of the extraordinary support it provided during the pandemic crisis.
However, officials said they are seeing an employment market that is still insufficient for full employment, which is a prerequisite for raising interest rates. Market prices now indicate that the first rate hike is likely to occur in November 2022.
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September Job Report
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