Rubin Gabriel T Said, Unemployment Rate Falls to 3.5 %. As high inflation impacted on the economy, US employers continued a pattern of gradual labor market softening in September by adding 263,000 jobs.
Despite a minor slowdown from August, the US economy added jobs at a steady pace in September.
The Labor Department reported Friday that nonfarm payrolls increased to 263,000 in the middle of the month, somewhat higher than the 250,000 predicted and hardly a decline from August’s steady 315,000 total rate.
The Labor Department announced on Friday that the unemployment rate decreased to 3.5% from 3.7% in August, a half-century low that was attained in July due to people abandoning the job market. Compared to the same month a year prior, wages increased 5.0% in September, a slower rate than August’s annualized 5.2%.
According to Sarah House, senior economist at Wells Fargo, “we see labor demand decreasing.” However, there is still a long way to go until the supply and demand of labor are in balance.
The leisure and hospitality sector created the most employment (83,000), leading the way in job growth. 60,000 more people were employed in healthcare.
The Labor Department said on Tuesday that there were 10% fewer job vacancies in August compared to July, when there were 11.2 million seasonally adjusted openings. The decline in openings of 1.1 million was the greatest in 2020 since the early stages of the Covid-19 epidemic. In 2019, job opportunities were 7.2 million per month on average, which was above their pre-pandemic level but below their lowest level in a year.
Although there are more and more signs that the economy is slowing down in some areas, the unemployment rate is still hovering around a new low of 3.5%, down from 3.7% in August. This shows that the shock to workers has not yet subsided. It is currently where it was shortly prior to the early 2020 COVID-19 pandemic.
Instead of additional people joining the workforce, the fall in the unemployment rate was caused by the unemployed obtaining employment. From 62.4% in August, the participation rate dropped to 62.3% today.
However, wage pressures remained constant at a steady 0.3% increase in average hourly wages, showing no signs of accelerating. As a result, income growth is now 5.0% year over year, down from 5.2% in August, and is now significantly slower than inflation.
Since the study was conducted before Hurricane Ian struck the shores of Florida and South Carolina, any effects from the storm would only be discernible in the data for October.
Despite being high, payroll growth indicates a further slowdown in hiring from a monthly average of more than 440,000 in the first half of 2022.
The percentage of working-age persons who are employed or actively seeking employment, known as the labor-force participation rate, decreased in September. Due to the labor market’s requirement for more employees to compete for employment in order to assist temper wage rise and increase overall productivity, this could make the Federal Reserve’s fight against inflation more difficult. In September, the participation percentage dropped from 62.4% in August to 62.3%.
A week in which investors significantly gambled that a slowing economy would compel the Federal Reserve to abandon its interest rate climb trajectory, and lower terminal levels, than the central bank had forecast, was brought to a close by a minor increase in profits growth. Over the past few days, Fed officials have rebuffed these predictions time and time again. Read More
The yield on the interest rate-sensitive 2-year Treasury note increased by 6 basis points to 4.31% at 08:45 ET (12:45 GMT), while the yield on the 10-year note was 3.91%.
Although the statistics confirmed a longer-term prediction that US rates will be higher than those in other advanced economies, the dollar increased to its intraday highs against the yen, sterling, and euro.
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