Federal Reserve policymakers have stronger reason to hold interest rates steady at their October meeting after US employment growth slowed sharply in September, raising concerns about the strength of the labour market.
US employers added just 29,000 jobs last month, far below the 90,000 economists had expected. August payroll gains were also revised lower, while the unemployment rate rose to 4.2% from 4.1%. Wage growth slowed as well.
The weaker employment figures have reduced expectations of another rate increase this month. Interest-rate futures now show less than a one-in-five chance of a hike at the Federal Reserve’s October 27-28 meeting, down from more than one-in-four before the jobs report.
The Fed raised its benchmark rate by 25 basis points last month, its first increase in three years, as policymakers sought to bring inflation back towards the 2% target. Inflation, however, remains elevated, with the Fed’s preferred measure at 3.4% in August.
Officials are expected to examine upcoming inflation data and other economic indicators before deciding whether another increase is needed later in the year.
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