October 10, 2022 — Jobs Report Stays Strong, Fed’s Strategy Unchanged


The Fed cautioned markets last week that signs of a weakening economy will not indicate the need to cuts rates next year. The Fed intends to keep raising rates and holding them until inflation is under control.

A better-than-expected September jobs report did not indicate the labor market is slowing significantly.  263,000 new jobs were reported, slightly above expectations for 260,000. Though, it was below August’s 315,000 and behind the first 6-months of 2022 where an average of 400,000 new jobs per month were created. The unemployment rate fell from 3.7 percent to 3.5 percent month-over-month, at a 50-year low.  Wage gains dropped slightly to 5 percent in September, down from 5.2 percent in August.  The labor force participation rate has remained low at 62.3 percent, and lagging participation means there are not enough workers competing for jobs to cool down wage growth. Even though the data is moving in the right direction, the stable job market will keep the Fed on track to raise rates again next month. Now would be a good time to evaluate your future financial obligations and look toward interest hedges to lock in the lower rates available for the next few weeks.