Continued job gains underpin consumer health, offering no relief for the Fed.  U.S. employers added jobs at a healthy, though more moderate pace in September and the unemployment rate fell, suggesting the labor market remains resilient against aggressive rate increases from the Federal Reserve.  While there have been some signs of moderating labor demand including a recent decline in job openings, U.S. employers continue to hire at a healthy clip.  Continued labor market strength supports consumer spending , but also drives wage growth (and inflation) as businesses compete for a limited pool of workers.  Overall, the report offers little relief for the Fed which continues to aggressively tighten policy with the goal of slowing wage growth and inflation.  Consumer price data, due out on Thursday (10/13) will factor heavily into the Fed’s next move, but today’s jobs report easily supports another plus-sized rate increase next month.

  • 263K jobs added in September – slightly higher than expected.  The U.S. labor market added 263k jobs in September (the smallest monthly advance since April 2021) compared to forecasts ranging from +199K to +389K with a median of +255K.  This represents deceleration from average monthly job growth of 420K thus far in 2022.  Job gains continued to be broad-based with particular strength in leisure & hospitality (+83K) and health care (+60K).  The labor market now counts approximately 500K more jobs than it did prior to the pandemic.
  • 3.5% unemployment – an unexpected improvement.  The U.S. unemployment rate moved back to 3.5% in September from 3.7% in August.  Forecasts ranged from 3.6% to 3.8% with a median of 3.7%.  The labor force participation rate was mostly unchanged at 62.3% compared to 62.4% in August while hourly earnings increased 5.0% over the last year and 0.3% month-over-month – consistent with August and expectations.