US adds 263,000 jobs in September, unemployment rate falls to 3.5%

The US labor market remained strong in September, showing its resilience. But the persistent strength in hiring also outlined the challenges facing the Federal Reserve as it tries to cut down job growth to curb inflation.

Companies added 263,000 more jobs in September on a seasonally adjusted basis, according to the Bureau of Labor Statistics report. That was down from 315,000 in August.

Also Read | Global economy moving towards a world of uncertainty: IMF

The Labor Department also said that unemployment dipped even lower to 3.5%, back to the pre-pandemic level and one of the lowest rates since the late 1960s. Economists had anticipated that the report would show that companies added 275,000 jobs in September while the unemployment rate held at 3.7%.

US Stocks were little changed in premarket trades after the report.

Also Read | OPEC announces major oil production cut, prices expected to rise: Report

Two months ago, the US recovered all the 22 million jobs lost during the pandemic, but now it sees a fresh challenge from a weakening economy.

The Federal Reserve’s next rate decision is scheduled for November 2, and officials stressed that the central bank is watching the jobs data closely as they determine how aggressive to be.

Also Read | Twitter denies refusing Elon Musk’s renewed bid

Fed officials are unlikely to be assuaged by the latest jobs report that the labor market is cooling off sufficiently to reduce the upward pressure on wages and inflation. One of the Fed’s major concerns is rising wages spurred on by the tightest labor market in modern times. Higher wages could feed into inflation and make it harder to rein in.

Also Read | Biden to pardon simple marijuana possession convicts

Hourly wages increased 10 cents in September to $32.46. The rise in pay over the last year slowed to 5% from 5.2% but remains one of the fastest increases since the early 1980s. The central bank is expected to keep raising interest rates until inflation starts to fall rapidly and the mismatch between two few workers and too many open jobs eases up. 

Also Read | EU to provide regulatory framework for crypto regulation: ESMA’s report

The September employment report showed some progress on that front. The so-called participation rate, the share of working-age people in the labor force, fell marginally to 62.3%.