America’s red-hot labor market FINALLY starts to cool: Private firms added 89,000 jobs in September -the slowest pace of growth since 2021
- Private employers added just 89,000 jobs in September, new report shows
- Figures fall well below economist’s predictions of 160,000
- Red-hot labor market has been repeatedly blamed for keeping inflation high
The US labor market is finally showing signs of a cooldown as private employers added just 89,000 jobs in September, new figures show.
It marks the slowest pace of growth since January 2021 when lockdown was still hammering businesses and causing job losses.
America’s red-hot labor market and consistent wage growth has been repeatedly blamed for keeping inflation high. The current rate is hovering at 3.7 percent.
But September’s gains marked a steep decline from August when private employers added 180,000 jobs to their payrolls, according to ADP.
And they also fell way below the 160,000 estimate from economists polled by Dow Jones.
The US labor market is finally showing signs of a cooldown as private employers added just 89,000 jobs in September, figures from payroll processor ADP show
Annual pay increases for people who remained in their jobs were 5.9 percent – the slowest gains since October 2021.
The data has prompted hope that the Federal Reserve could stop raising interest rates. Fed officials are set to meet again on November 1 and are widely expected to boost interest rates by 0.25 percentage points from the current range of 5-5.25 percent.
ADP chief economist Nela Richardson said: ‘We are seeing a steepening decline in jobs this month. Additionally we are seeing a steady decline in wages in the past 12 months.’
The ADP report independently uses data from anonymized and aggregated payroll data from its clients.
Its findings do not necessarily correlate with the official federal jobs report due out on Friday.
The report comes after JPMorgan CEO Jamie Dimon yesterday warned that interest rates could still go as high as 7 percent – their highest level since 1990.
America’s red-hot labor market and consistent wage growth has been repeatedly blamed for keeping inflation high. The current rate is hovering at 3.7 percent
JPMorgan Chase CEO Jamie Dimon, pictured, has warned Americans could soon be facing 7 percent interest rates – the highest level since 1990
In an interview broadcast yesterday Dimon said the US needed to prepare for further rate hikes – adding his own bank was prepared for them to go as high as 8 percent.
When asked if it could reach 7 percent, Dimon told Bloomberg TV: ‘Yeah, it’s possible. When I talk to my board I say ‘can it go to 7%?’ Yes.
‘Are there factors that would drive it higher than it is today? Yes.’
He added: ‘I’m just saying be prepared for it. I’m not worried about JPMorgan. We’re prepared, we can handle 7 percent, we could handle 2 percent again.’
Pressed on whether the firm could cope with a hike as high as 8 percent, he said: ‘Yes.’
Dimon appeared to be doubling down on an interview he gave to the Times of India last week where he warned the world is not prepared for 7 percent interest rates.
Speculating what that meant in real terms, he said it could spell a mild recession or even a ‘harder recession,’ adding there are ‘a lot of potential bad outcomes.’