US hiring stayed solid in September as employers add 263,000 jobs | Unemployment News

The US central bank is trying to contain the economy enough to fend off its worst inflation in decades without triggering a recession.

United States employers reduced their hiring in September but still added 263,000 solid jobs, an encouraging dose of news that could mean efforts by the Federal Reserve The US (Fed) to cool down the job market and reduce inflation is starting to make progress.

Friday’s government report showed last month’s job growth fell from 315,000 in August and the unemployment rate fell from 3.7% to 3.5%, from the lowest level in the second half. century.

September’s slightly more moderate hiring pace may be welcomed by the Fed, which is trying to contain the economy enough to tame The worst inflation in four decades without causing recession. Slower job growth will mean less pressure on employers to raise wages and pass those costs on to their customers through price increases – a cause of high inflation .

Public anxiety about high prices and the prospect of a recession is also carrying political consequences like President Joe Biden’s Democratic Party. struggle to maintain control Congress in the midterm elections in November.

In its epic battle to curb inflationThe Fed has raised its benchmark interest rate five times this year. It is aiming to slow economic growth enough to reduce annual price increases back to the 2% target.

It still has a long way to go. In August, a key measure of annual inflation, the consumer price index, amounted to 8.3%. And right now, consumer spending, the main driver of the US economy, is exhibit some resilience. In August, consumers spent slightly more than in July, a sign that the economy is stabilizing despite rising borrowing rates, volatile stock markets and food and money prices. Rents and other necessities increased.

Fed Chairman Jerome Powell has bluntly warned that the war on inflation will “bring some pain,” especially in the form of layoffs and higher unemployment. Some economists still hope that despite persistent inflationary pressures, the Fed will still try to achieve a so-called “soft landing”: Growth slows enough to tame inflation, without going too far. causing the economy to fall into recession.

That would be a notoriously difficult task, and the Fed is trying to accomplish it at a dangerous time. The global economy, weakened by food shortages and soaring energy prices due to Russia’s war against Ukraine, may be on the brink of recession. Kristalina Georgieva, executive director of the International Monetary Fund, warned on Thursday that the IMF is downgrading its estimate of world economic growth by $4 trillion through 2026 and that “everything is more likely.” gets worse before it gets better.”

Powell and colleagues on the Fed’s policymaking committee would like to see signs that the abundance of jobs available – currently 1.7 jobs per unemployed American on average – will gradually decline. . Some encouraging news arrived this week, as the Labor Department reported that job opportunities decrease increased 1.1 million in August to 10.1 million, the least since June 2021.

Nick Bunker, head of economic research at the Reality Hiring Lab, suggests that among the items on the “soft landing flight checklist” is a “decrease in job opportunities without the unemployment rate spiked, and that’s what we saw a few months ago.”

On the other hand, by any standards of history, open rates are still phenomenally high: In records dating back to 2000, they never topped 10 million in a single month until last year.

Economist Daniel Zhao of the job site Glassdoor argues that the willpower focus on the job market may be overdone. Regardless of what happens to jobs and wages, Zhao suggested, Fed policymakers likely won’t give up their rate hike campaign until they see evidence that they actually do. achieve the goal.

“They want to see inflation slow,” he said.