September’s jobs report brought good news for workers, but left Fed watchers with qualms. The US added 336,000 jobs in September, the Bureau of Labor Statistics (BLS) reported, far outpacing economists’ expectations. The robust jobs growth is a sign the economy remains strong despite interest rate increases and high inflation. But it may also prompt the Fed to consider hiking rates again during its next meeting.
The unemployment rate was 3.8%, the same as in August. It’s been below 4% since December 2021. Such a lengthy period of low unemployment hasn’t happened since the 1960s, according to the New York Times.
Hiring was up or static across almost all sectors. “It was a blockbuster jobs report, but just as important was how well-rounded hiring was,” Robert Frick, a corporate economist with the Navy Federal Credit Union, told the Wall Street Journal. Leisure and hospitality saw the largest growth, with restaurant and bar employment reaching pre-pandemic levels, followed by the government and health sectors.
Wage growth, however, was lower than analysts expected. The US only saw a 0.2% hourly wage gain over August.
Will jobs growth spook the Fed? The BLS’s jobs report is one of the key economic indicators the Fed looks at when determining whether to raise interest rates. September’s strong jobs growth may make a rate hike more likely when the Fed next meets on Halloween.
Fears of an increase may be one reason the S&P 500 fell to a four-month low. The 10-year Treasury bond yield jumped to 4.88% after the report came out, the highest it’s been since 2007.
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