For the Federal Reserve, the jobs figures highlight how little progress they're making in their fight against inflation.
Federal Reserve Board Chairman Jerome Powell speaks during a conversations with leaders from organizations that include nonprofits, small businesses, manufacturing, supply chain management, the hospitality industry, and the housing and education sectors at the Dederal Reserve building, Friday, Sept. 23, 2022, in Washington. was welcome news: Businesses kept hiring at a brisk pace, unemployment fell back to a half-century low and average pay rose.
Rising U.S. interest rates have roiled global markets and caused a sharp fall in U.S. stock prices. On Friday,Yet as it struggles to defeat the worst inflation bout in four decades, the Fed is focused much more on the job market than on the financial markets. Underlying measures of inflation indicate that prices are still surging.
Fed officials have signaled that the unemployment rate needs to be at least 4% to slow inflation. Some economists say the jobless rate would need to be even higher. Either way, low unemployment points to more rate hikes to come. Such an increase “would be lower than recent months but very healthy relative to past experience," Waller said. “As a result, I don’t expect tomorrow’s jobs report to alter my view that we should be focused 100 percent on reducing inflation.”An increase in people competing for jobs would make it easier for employers to fill positions without offering higher wages. That would reduce inflation pressures without requiring many layoffs.
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