Jobs growth slows for second consecutive month in September

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Jobs growth slows for second consecutive month in September

U.S. job growth slowed for a second consecutive month in September, but hiring remained steady despite rising interest rates, scorching inflation and mounting recession fears.

The Labor Department's monthly payroll report released Friday showed 263,000 jobs, slightly higher than the 250,000 jobs forecast by Refinitiv economists. It's the lowest monthly gain since April 2021.

The unemployment rate, however, dropped to 3.5%, returning to the historic low recorded in July.

Wages were higher, but came in lower than forecasts. The average hourly earnings went up 0.3% for the month and 5.2% from the previous year, slightly less than the 0.4% and 5.3% estimates from Refintiv.

While monthly jobs data is important, it is closely watched for signs that the labor market is starting to slow down from its frenzied pace as policymakers try to wrestle inflation, which is still near a 40 year high, back to 2%.

In September, higher rates could lead to increases in unemployment, according to a post-meeting press conference. Powell said that we need to have softer labor market conditions. We have to get inflation behind us if we want to set ourselves up, really light the way to another period of a very strong labor market. I wish there was a painless way to do that. The labor market has remained one of the few bright spots in the economy for months. There are growing signs that the labor market is beginning to weaken, with several major companies including Alphabet's Google, GE, Apple, Meta and Microsoft, announcing hiring freezes or layoffs in recent weeks.

The number of Americans filing first-time claims went up to 219,000, a five-week high.

If unemployment benefits continue to climb, it could be a sign that employers are laying off workers as consumers pull back on spending and the economy grinds to a halt. The data released this week shows that to the lowest level since early in the pandemic, indicating that employers are putting their hiring on the back burner.

This is a developing story.