OCTOBER 9, 2023 – US JOB GROWTH ROCKETS IN SEPTEMBER
The US economy added 336,000 new jobs in September, almost double the expectation for 170,000 jobs, and well ahead of the upwardly revised 227,000 (+40,000) new jobs added in August and 236,000 (+89,000) in July. The September increase is the largest since January 2023. Average hourly earnings were up 0.2 percent for the month, and up 4.2 percent year over year, slightly below expectations. The unemployment rate remained at 3.8 percent.
The robust report indicates a resilience in the US economy, which makes it likely the Fed will continue to raise rates this year to control inflation. The higher-than-expected job growth is firing consumer spending and has sustained economic growth. The odds of another interest rate hike this year has risen to 43 percent. Consequently, the initial rate cut expected in 2024 will be pushed out later in the year.
The policymakers said recently they remain concerned about inflation and rates are almost certain to remain high for “some time.” They believe a tight labor market will push wages up and result in higher prices of goods and services. The CPI for September will be released this week.