WASHINGTON (AP) — America’s employers slowed their hiring in September but still added 263,000 jobs, a solid figure that will likely keep the Federal Reserve on pace to keep raising interest rates aggressively to fight persistently high inflation.
Friday’s government report showed that hiring fell from 315,000 in August, marking the weakest gain since April 2021. The unemployment rate fell from 3.7% to 3.5%, matching a half-century low.
The Fed is hoping that slower job growth would mean less pressure on employers to raise pay and pass those costs on to their customers through price increases — a recipe for high inflation. But September’s hiring — slightly stronger than economists had expected — might not have slowed enough to satisfy the central bank’s inflation fighters.
In September, hourly wages rose 5% from a year earlier, the slowest year-over-year pace since December but still hotter than the Fed would want. The proportion of Americans who either have a job or are looking for one slipped slightly, a disappointment for those hoping that more people would enter the labor force and help ease worker shortages and upward pressure on wages.
“A moderation in job and wage growth will be welcome developments for Fed officials,” Rubeela Farooqi, chief U.S. economist at High Frequency Economics, wrote in a report. Still, she doesn’t expect the softer jobs and wage numbers to keep the Fed from raising its benchmark short-term rate by a sizable three-quarters of a point in November and by a half-point in December.