Investors are banking on the jobs report as an indicator of whether the US Federal Reserve will squeeze in one more rate rise before the end of the year.
an unexpectedly robust gain that suggests that many companies remain confident enough to keep hiring despite high interest rates and a hazy outlook for the economy., which was revised sharply higher. July’s hiring was also healthier than initially estimated. The economy has now added a healthy average of 266,000 jobs a month in the past three months.
The September hiring report comes at a time when the Fed is scrutinising every piece of incoming economic data to decide whether it needs to raise its benchmark rate once more this year or instead just leave it elevated well into 2024.Job growth has remained resilient for most of the past 2 1/2 years even after high inflation flared and the Fed jacked up interest rates at the fastest pace in four decades.
The job market has been so strong for so long that a slowdown, as long as it remains gradual, would still keep it at healthy levels. The number of Americans seeking unemployment benefits, which tends to track the pace of layoffs, has remained persistently low. Many companies are reluctant to shed workers after having found it difficult to staff up again after the 2020 pandemic recession ended with a quick and robust recovery.
On the one hand, Fed officials, including chairman Jerome Powell, have stressed that inflation remains too far above their 2 per cent target and that another rate hike might be needed to slow it to that level. At the same time, several Fed policymakers have underscored that they want to be careful not to raise borrowing rates so much as to trigger a deep recession.
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