Job growth slowed for a second month in September as a series of supersized interest rate hikes permeated the U.S. economy, but the softer nonfarm payroll gain is still unlikely to deter policymakers from aggressive monetary action to fight inflation that remains at a decades-high level.
Here are highlights from the latest monthly jobs report released by the Labor Department on Friday compared to consensus estimates from Bloomberg.
- Non-farm payrolls: plus 263,000 vs. 255,000 expected
- Unemployment rate: 3.5% vs. 3.7% expected
- Average hourly earnings, month-over-month: plus 0.3% vs. 0.3% expected
- Average hourly earnings, year-over-year: plus 5.0% vs. 5.0% expected
The cool-off in September employment data is a welcome sign for Fed officials trying to tamp down an extraordinarily tight labor market that has placed upward pressure on wages and contributed to soaring prices. However, the jobs added remains substantially higher than the 150,000-200,000 average that was typical before the pandemic, leaving room for the U.S. central bank to proceed with hefty rate increases.
“Today’s job number is a hawkish reading, with almost all the elements of the report moving in the wrong direction for the Fed,” Principal Global Investors Chief Global Strategist Seema Shah said in a note.
Stocks plunged and Treasury yields spiked on Friday as investors digested the data after hoping a larger decline in the headline number would encourage sooner policy shift by the Fed.
“Payrolls were broadly in line with expectations but, importantly in this good news is bad news: markets were hoping for a downside surprise today,” Shah added. “Instead, the number only confirms that the Fed needs to hike rates by a fourth consecutive 0.75% in November.”
Click here to see the full report from Alexandra Semenova at Yahoo Finance.
