After a year of a labor shortage, the labor market is easing up.
This morning the Bureau of Labor Statistics released a report that shows that the US created 263,000 new jobs in September, which beat the average estimate of 250,000 payrolls. The unemployment rate has also fallen to 3.5%, landing below economists’ forecasts.
The BLS report reflects September’s better-than-expected job creation, but also puts the Federal Reserve in an uncomfortable position.
The central bank has said that the labor market is a subject of extreme imbalance. The gap between demand for labor and the supply of workers will most likely keep inflation high, according to Business Insider.
The Fed’s higher interest rates dampened demand through the summer, which has led companies to prepare for weaker revenues. Organizations have had to either accept lower profits, cut costs, or reduce their headcount. Due to this, hiring plans have had to change, and there is no longer a labor shortage.
In September, average hourly earnings for all employees on private nonfarm payrolls rose by 10 cents, or 0.3 percent, to $32.46. Over the past 12 months, average hourly earnings have increased by 5.0 percent. In September, the average workweek for all employees on private nonfarm payrolls was 34.5 hours, according to the report.
