US economy adds 263,000 jobs as labor market growth slows

Job growth continued to slow in September, another sign that the labor market is slowing from its red-hot peak earlier this year, with the US economy remaining an area of ​​strength.

Employers added In its monthly jobs report on Friday, the Labor Department announced 263,000 jobs last month, after months of strong job growth that defined the pandemic recovery economy. It’s the lowest monthly increase since April 2021.

The unemployment rate fell to 3.5 percent, to return to its level in February 2020 before the outbreak of the epidemic.

Even as other economic indicators have deteriorated in recent months, the labor market has continued to thrive. But job prospects are shifting, with workers seeing moderate wage growth and employers slowing hiring in anticipation of a slowdown in sales.

“Employers are primarily hiring for replacement rather than growth and expansion, and they focus on core roles,” said Julia Pollack, economist at ZipRecruiter. “But when it comes to payment, they still have to hire because they still see customers walking through the door and making good sales.”

Ahead of Friday’s report, Wall Street forecasters had expected the September figure to add 250,000 jobs.

The biggest job gains were seen in leisure and hospitality, with 83,000 jobs added in September, one of the few sectors yet to return to pre-pandemic levels – the industry is still 1.1 million jobs below its level in February 2020. Healthcare is up 60,000 jobs. , with strong gains in hospitals and mobile health services.

Professional and business services added 46,000 jobs. Temporary Assistance Services added 27,000 jobs. Losses in the temporary industry are usually a leading factor in an economic downturn.

Manufacturing, construction, and wholesale trade continued to show strong growth. Transportation, warehousing, retail, government, and mining showed little change. Financial services employment decreased slightly.

Nick Bunker, director of North American economic research for the job site Indeed, said the labor market slowdown shouldn’t be cause for concern.

“We have to change our expectations,” Bunker said. “The gains earlier this year have been astronomical, because we were in a pretty big hole when it comes to jobs, and now we’re getting something closer to full employment.”

Concerns about a possible downturn erupted as did the stock market landedAnd the Inflation soaredand the housing market cool down. Nearly two-thirds of economists recently surveyed by Bankrate, a consumer financial services company, Anticipate a recession by mid-2024.

The Federal Reserve has warned that families and the labor market will suffer some pain as officials complete to raise interest rates To calm demand and thus reduce inflation. So far, the labor market has remained resilient, but it is too early to see the full effects of the Federal Reserve’s monetary policy.

Other indications are that the Fed is achieving its goal of easing the labor market without massive layoffs.

Average hourly earnings continued to increase, but at a slower rate of 0.3 percent this month, to $32.46 per hour. Slowing wage growth indicates that low-wage workers in particular are feeling more inflationary pressure while employers have been able to attract workers without raising wages.

“To the extent that employers actually raised wages earlier this year, those higher wages are still working to attract workers,” said Elise Gould, chief economist at the Economic Policy Institute, a left-leaning think tank. “Wages don’t go down but they don’t go up at the same rate.”

The labor force participation rate was little changed at 62.1 percent, an area where economists hope to see more growth to ease the labor shortage.

Employers in August had 10.1 million jobs, down about 10 percent, compared to the previous month, according to a Labor Department report. Released on Tuesday.

The continued tightening of the labor market allowed workers to flex their muscles to demand better wages and working conditions. Last week, a three-day strike at San Francisco International Airport raised $5 an hour for nearly 1,000 food service workers. Meanwhile, Amazon will face union elections next week at a warehouse near Albany, New York, which could create the second union store in the e-commerce giant’s logistics empire.

But workers’ wage gains are still eroded by high inflation, which has disproportionately affected lower-income families that allocate a larger share of their income to food and housing, as prices have continued to rise sharply.

Jamika Ruffin, 29, earns $10 an hour as a cashier at McDonald’s in Detroit, after seven years at the fast-food chain. She got a 25-cent increase in January, but she said the increase didn’t go far.

“We don’t live on these wages,” Ruffin said. “We are alive. The cost of living has gone up a lot this year.”

Ruffin said she can’t always pay her phone bill and has to borrow money so her daughter can go on field trips with her school. And at the end of the month, they visit soup kitchens for food.

Recent shifts in the labor market have helped some employers.

said Jeff Olmer, owner of Action Hardware in Wilmington, Del. It’s easier to hire now after months of struggling to compete with larger employers of retail workers. He said high school students can find jobs elsewhere starting at $15 an hour, much more than he can pay.

“We’ve had better luck lately,” Olmer said. “The power between the owner and the staff has changed, but it’s starting to go the other way.”

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