U.S. employers added 263,000 jobs in September
AILSA CHANG, HOST:
The U.S. job market downshifted a bit last month. Employers are still adding jobs but not at the same pace that they were earlier this year. And that's not necessarily a bad thing. The slowdown in hiring could help curb inflation. But that wasn't enough to reassure investors. Stocks fell sharply today, with the Dow Jones Industrial Average plunging more than 600 points. NPR's Scott Horsley joins us now to explain. Hey, Scott.
SCOTT HORSLEY, BYLINE: Hi, Ailsa.
CHANG: OK, so this snapshot that the Labor Department offered this morning on unemployment and employment - can you just tell us a little bit more about what exactly it shows?
HORSLEY: It shows the economy is still adding jobs. Employers added 263,000 jobs last month. That brings the total this year to nearly 3.8 million jobs. But the overall pace of hiring has slowed down a bit. You can see that, for example, in the manufacturing sector. Nicole Wolter runs a factory in Wauconda, Ill., that makes packaging equipment for food companies. She's still busy, she says, but her phone is not ringing as much as it was with customers seeking price quotes. Wolter says she's not looking to add any additional workers right now.
NICOLE WOLTER: In the beginning of the year, we were just so swamped. And I would say in, like, about the past three to four weeks, I've seen a slowdown on that activity. I've been hearing that everyone's just kind of waiting it out to kind of see what happens after the election, trying to figure out if there really is this impeding recession that's going to start looming.
HORSLEY: Wolter also told me she had such a tough time finding workers over the last couple of years, she's put more money into automation. And that is allowing her to produce more with the workforce she already has.
CHANG: OK. So then what kinds of businesses are still adding workers now?
HORSLEY: Well, a lot of businesses that rely on in-person customers are still playing catch-up after taking a big hit early in the pandemic. Bars and restaurants, for example, added another 60,000 jobs last month. September was also a big month for health care hiring. In fact, it's the first month that employment in health care is finally back to where it was before the coronavirus struck.
CHANG: OK, that's good news. How do these changes in the job market affect inflation, though?
HORSLEY: You know, it's a mixed picture. For some time now, the Federal Reserve's been worried that the job market is out of balance. There aren't enough workers to go around. Employers are having to compete for help. And as a result, wages have been rising at a rapid rate. Now, that sounds like a good thing, but it can also put upward pressure on prices. So the inflation watchdogs at the Federal Reserve were actually happy to see some slowdown in employers' demand for workers and a corresponding slowdown in wage gains. Average wages in September were up 5% from a year ago. That's a smaller increase than the month before.
So that's moving in the right direction as far as the Fed's concerned. What's not so good, though, is there were fewer available workers in September. Some 57,000 people dropped out of the job market last month. And that's not the direction the Fed wants to go. Now, that drop was small compared to the big influx of workers we saw in August. So you don't want to make too much out of it. But it is part of the reason the unemployment rate fell last month to just 3.5%, which matches the lowest level in half a century.
CHANG: Well, as we said at the top, Scott, markets are way down today. Can you tell us a little more about that?
HORSLEY: Yeah. The Dow fell more than 2%. The rate-sensitive Nasdaq tumbled nearly 4%. Investors see that low unemployment rate. They see wages still climbing. And they think to themselves, inflation's not going away anytime soon. And that means the Fed is even more likely to keep raising interest rates. Higher interest rates means lower stock prices.
CHANG: That is NPR's Scott Horsley. Thank you so much, Scott.
HORSLEY: You're welcome.
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