The economic outlook in the US shows accelerated job growth during the month of September, pointing out that the labor market maintains its strength and support, which may lead the Federal Reserve to consider raising interest rates before the end of the year. However, this growth is accompanied by a moderation in salary increases.
The Department of Labor reported a notable increase of 336,000 jobs in nonfarm payrolls over the last month. Additionally, August data was revised upward, showing the addition of 227,000 jobs instead of the 187,000 initially reported.
Economists’ projections which pointed to an increase of 170,000 jobs, were surpassed by this unexpected increase. This surprise growth occurred despite a temporary reduction in payrolls at the beginning of September due to seasonal adjustments related to the return of education workers from summer vacation.
Employment: the data observed by the Fed
To maintain an adequate rate of population growth of working agethe economy needs to create at least 100,000 jobs per month.
This resistance and stability in the labor market, iEven after 18 months since the Federal Reserve began raising interest rates to control demandsuggests that monetary policy could maintain its restrictive nature in the near future.
Although most economists does not anticipate an additional rate increase by the central bank American for the remainder of the year.
Since March 2022, the Federal Reserve has increased its benchmark interest rate by 525 basis points, bringing it to the current range of between 5.25% and 5.50%.
Monthly wage growth continues on a moderate trend, with a 0.2% increase in average hourly earnings in September, similar to that recorded in August. In the last 12 months to September, wages have increased by 4.2%, slightly below the 4.3% seen in August. Although they continue to remain above 3.5%, a pace that economists consider consistent with the 2% inflation goal established by the Federal Reserve.
The robustness of the labor market is contributing to economic support, with growth estimates for the third quarter reaching up to 4.9% annualizedmore than double the non-inflationary rate of about 1.8% that Federal Reserve officials consider ideal.
Source: Ambito
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