Steady US job growth a signal for Fed

Steady US job growth a signal for Fed

Data suggest US economy may be healthy enough to handle more rate hikes

A pedestrian passes a “Help Wanted” sign in the door of a hardware store in Cambridge, Massachusetts on July 8. (Reuters File Photo)
A pedestrian passes a “Help Wanted” sign in the door of a hardware store in Cambridge, Massachusetts on July 8. (Reuters File Photo)

WASHINGTON: The US labour market remained strong in September, showing its resilience. But the persistent strength in hiring also underscored the challenges facing the Federal Reserve as it tries to curtail job growth enough to tame inflation.

Employers added 263,000 jobs last month on a seasonally adjusted basis, the Labor Department said on Friday. That was down from 315,000 in August. The unemployment rate fell to 3.5%.

The Federal Reserve’s next interest rate decision is scheduled for Nov 2, and officials have emphasised that the central bank is watching the jobs data closely as they determine how aggressive to be.

They are eager to see evidence that interest-rate increases are cooling off a frenzied labour market, but not enough to tip the economy into a recession.

For months, job growth defied expectations, as employers continued to add workers despite increased borrowing costs.

More recently, there have been indications that employers are beginning to rein in hiring. The number of job openings decreased in August, to 10.1 million from 11.2 million in July. Filings for unemployment benefits last week rose modestly. Companies, including Walmart and Amazon, have announced slowdowns in hiring, while others, including FedEx, have frozen hiring altogether.

“The labour market has been a Ferrari the last year and a half,” said Nick Bunker, director of North American economic research for the career site Indeed. “It’s slowing down but still moving very, very quickly.”

The jobs report is the second-to-last before the midterm elections, and both political parties are almost certain to seize on the data to make the case that they are the best stewards of the economy.

This article originally appeared in The New York Times


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