The US labor market is finally starting to cool: Private companies added 89,000 jobs in September – the slowest growth rate since 2021
- Private employers added just 89,000 jobs in September, a new report shows
- The figures are well below economists’ predictions of 160,000
- The red-hot labor market has been repeatedly accused of keeping inflation high
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The US labor market is finally showing signs of cooling as private employers added just 89,000 jobs in September, new figures show.
It marks the slowest pace of growth since January 2021, when the lockdown continued to put pressure on businesses and caused job losses.
America’s red-hot labor market and consistent wage growth have repeatedly been blamed for keeping inflation high. The current rate fluctuates at 3.7 percent.
But September’s gains marked a sharp decline from August, when private employers added 180,000 jobs to their payrolls, according to ADP.
And they also fell well below the estimate of 160,000 from economists polled by Dow Jones.
The US labor market is finally showing signs of cooling as private employers added just 89,000 jobs in September, according to figures from payroll processor ADP
Annual pay increases for people who stayed in their jobs are 5.9 percent – the slowest increase since October 2021.
This data has raised hopes that the Federal Reserve might stop raising interest rates. Fed officials will meet again on November 1 and are widely expected to raise rates by 0.25 percentage points from the current range of 5-5.25 percent.
ADP chief economist Nela Richardson said: “We are seeing an increasingly sharp decline in job creation this month. In addition, we have seen a steady decline in wages over the past twelve months.”
The ADP report independently uses data from anonymized and aggregated payroll data of its customers.
The findings do not necessarily reflect the official federal jobs report due Friday.
The report comes after JPMorgan CEO Jamie Dimon warned yesterday that interest rates could still rise as high as 7 percent – the highest level since 1990.
America’s red-hot labor market and consistent wage growth have repeatedly been blamed for keeping inflation high. The current rate fluctuates at 3.7 percent
JPMorgan Chase CEO Jamie Dimon, pictured, has warned that Americans could soon face interest rates of 7 percent – the highest level since 1990
In an interview broadcast yesterday, Dimon said the US should prepare for further rate hikes – adding that his own bank was prepared for them to rise to 8 percent.
Asked if it could reach 7 percent, Dimon told Bloomberg TV: “Yes, it is possible. When I talk to my board, I say: ‘Can it go to 7%?’ Yes.
“Are there factors that could drive it higher than it is now? Yes.’
He added, “I’m just saying be prepared for it. I’m not worried about JPMorgan. We are prepared, we can handle 7 percent, we can handle 2 percent again.’
When asked if the company could handle an increase of as much as 8 percent, he said: “Yes.”
Dimon appeared to be following up on an interview he gave to the Times of India last week, in which he warned that the world is not prepared for 7 percent interest rates.
Speculating what that meant in real terms, he said it could mean a mild recession or even a “harder recession,” adding that there are “a lot of potential bad outcomes.”