The economy added 263,000 jobs in September, the second straight month of slower growth amid higher interest rates and soaring inflation
The unemployment rate fell from 3.7% fell to 3.5%, reclaiming a 50-year low, the Labor Department said Friday. But that's largely because 57,000 Americans left the labor force, which includes people working or looking for jobs, even as payrolls expanded.The job market has been remarkably buoyant this year, notching average monthly gains of more than 400,000
The dip last month suggests labor shortages could persist and push pay increases higher. That likely would further fuel inflation that’s just below a 40-year high. The renewed drop in participation could help convince the Federal Reserve to approve another outsize interest rate hike in early November.
Leisure and hospitality, which includes restaurants and bars, the sector hit hardest by the pandemic, led the job gains with 83,000, though it remains 1.1 million short of its pre-COVID level. Health care added 60,000 and professional and business services, 46,000. But many economists now believe the Fed rate hikes will tip the nation into a recession next year and the uncertainty is starting to take a toll on hiring. Payroll gains slowed from more than 500,000 in July to about 300,000 in August.
Also curtailing employment last month: Employers brought on 1.3 million teens and young adults for the summer season and most returned to school, Goldman Sachs wrote in a research note. “Hospitality and airlines, for example, remain in catch-up mode having cut deeply through the pandemic,” Hancock says.
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