American employers added 263,000 jobs in September, compared with 315,000 in August.
William Lee, chief economist at the Milken Institute, said these numbers give a green light for the Federal Reserve to go forward with its plan to raise rates until inflation starts to turn around.
“Right now, this fall report just is not good news for the Fed, because it shows it has a long way to go,” Lee said.
The Federal Reserve has been attempting to rein in inflation, which ran at a 40-year high in June. Since then, it has eased only slightly, although the Fed has raised its benchmark interest rate five times this year.
Julia Pollak, ZipRecruiter chief economist, said she also thinks the Federal Reserve will hold steady and continue to raise rates until they see evidence that inflation is coming down.
“They don’t want to repeat the mistake of the ’70s and pull back too early only to let inflation take off again, and so they’re going to stick with this plan,” she said. “It does not yet appear to be damaging the housing market or the labor market too much.”
Despite the decline in growth, the report shows the market remains very strong, Pollak said.
“It’s the lowest since April of 2021, but it’s huge still,” she said. “It’s 60% more than the average annual gain in 2019.”
Pollak said there is evidence that business activity and demand are weakening abroad.
“A slowdown in Europe and Asia could actually reduce commodity prices, reduce inflationary pressures without too much pain here, and without too much of a decline in consumer spending here,” she said.
On the other hand, Lee said with inflation so high, it has become one of the biggest problems facing the United States today.
“No one can make their ends meet, budgets are getting stretched,” he said. “We can’t afford to pay our rent, pay for gasoline and pay for food. … It’s not just an economic problem. It’s also a social problem. And in a few months, it’ll be a political problem because the voters have lost confidence in economic policymakers to be able to preserve price stability and full employment.”